National Stock Exchange on July 4 said it will place an overall capping of 90% over the issue price for small and medium enterprises (SME) IPOs during special pre-open session.
"To standardise the opening price discovery/ equilibrium price across exchanges during special pre-open session for initial public offer (IPO) for the SME platform, it has been decided to put an overall capping up to 90% over the issue price for SME IPOs," said NSE in a circular, which will come in force with immediate effect i.e. July 4, 2024.
NSE also said that the price control cap of 90 percent shall be applicable only to the SME segment and not for Mainboard IPOs/Relisted Securities/Public Debt.
In March, SEBI chairperson Madhabi Puri Buch said that the market regulator has noticed "signs of manipulation in the SME segment".
The regulator tried to provide a listing environment for SMEs that is more facilitative and thus less regulated than that for the mainboard. The regulator received feedback that some entities were misusing this facilitative framework, she said.
SME IPOs were in the news throughout 2023 for attracting record-breaking investments. A record 176 companies raised Rs 4,842 crore from the BSE SME and NSE Emerge platform during the previous year. While the companies intended to raise only Rs 4,842 crore, a record Rs 2.8 lakh crore worth of applications were submitted.
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