Amid the debate over small and medium enterprise (SME) IPOs or returns of companies, the Securities and Exchange Board of India (SEBI) is now in a mood to tighten the rules. SEBI’s full-time member Ashwini Bhatia has indicated this. He said that SEBI will tighten the rules monitoring SME IPOs. This comment came a few days after SEBI warned investors about misleading business estimates of many SMEs. Bhatia said that there is a plan to bring a circular letter on this aspect before the end of this year.
Advice to Chartered Accountants
Bhatia said that these changes could include better monitoring and strict scrutiny on the auditors’ front. He said that if Chartered Accountants (CAs) do their work diligently, then problems can be avoided. Bhatia said that primary issuance has reached Rs 2 lakh crore in the first five months of the financial year, whereas in the entire last financial year 2023-24, this figure was Rs 1.97 lakh crore.
SEBI warned investors
Recently, SEBI warned investors against investing their money in the shares of such small and medium companies (SMEs) which manipulate the share price by presenting a false picture of their operations. Let us tell you that after listing, some SME companies or their promoters are making such public announcements which create a positive image of their operations. After such announcements, various corporate actions like bonus issue, stock split and preferential allotment are taken.
SEBI said- Investors are urged to be cautious and vigilant about the above methods and exercise caution while investing in such securities. Also, investors are advised not to trust unverified social media posts and not to invest on the basis of suggestions / rumors.