IPO Investors
The Indian stock market is trading at a record high. To take advantage of this, small and big companies are bringing IPOs one after the other. Investors are also not shying away from investing money to get listing gains from IPOs. However, in this blind race, many companies and promoters are also cheating investors. This is causing losses to investors. Now SEBI has its eyes on such IPOs. After this, SEBI has decided to tighten the rules. This will benefit crores of small investors of the country. At the same time, companies will not be able to raise money from the market in an illegal manner.
Preparations to tighten the rules
Securities and Exchange Board of India (SEBI) full-time member Ashwini Bhatia on Friday said the capital market regulator will tighten rules monitoring SME IPOs. The remarks came days after SEBI warned investors about misleading business estimates of many small and medium enterprises (SMEs). Bhatia said there is a plan to bring a discussion paper on this aspect before the end of this year. Bhatia said these changes could include better monitoring and strict scrutiny on the auditors’ front. He said problems can be avoided if chartered accountants (CAs) do their job diligently. Bhatia said primary issuances have reached Rs 2 lakh crore in the first five months of the financial year itself, while in the entire last financial year 2023-24, this figure was Rs 1.97 lakh crore.
Investors cautioned
The Securities and Exchange Board of India (Sebi) has cautioned investors against investing their money in shares of such small and medium companies (SMEs) which manipulate share prices by presenting a false picture of their operations. SEBI said in a statement that it has come to notice that after listing, some SME companies or their promoters are making such public announcements which create a positive image of their operations. Various corporate actions such as bonus issue, share split and preferential allotment are done after such announcements. Recently SEBI has passed orders against such units. It can be seen that the modus operandi of these units is broadly similar to the methods mentioned above. To serve as an alternative source of raising funds for emerging companies.
The SME platform of the stock markets was launched in the year 2012. Since then, the number of SME issues has increased as well as the participation of investors in such offers. More than Rs 14,000 crore has been raised through this platform during the last decade, of which about Rs 6,000 crore was raised during the last financial year (2023-24) alone.
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