Participation of retail investors may be limited in SME IPOs. Minimum application size for SME IPOs may be doubled.
Currently the minimum application size for SME IPO is Rs 1 lakh. SEBI claims that it should be increased to Rs 2 lakh or 4 lakh and today we will tell about this in our report.
The purpose of increasing the minimum application size is to reduce the participation of retail investors. SEBI wants that only those investors whose risk appetite is quite high should become participants in SME IPO.If seen, in the last few days, there has been an increase in the participation of retail investors in SME IPO, after which this decision can now come.
Investor participation in SME IPO
| Ratio of Applicants to Allotted Investors |
| Years | Ratio |
| Financial Years 2022 | 4X |
| Financial Years 2023 | 46X |
| Financial Years 2024 | 245X |
To understand these figures, investors are investing a lot of money in SME IPOs for the sake of listing gain. Seeing the increase in participation in SME IPO, the company has also raised a lot of money from the market.
Now talking about the business year 2024, an amount of Rs 6000 crore has been raised through 196 SME IPOs. In the current financial year till October, an amount of Rs 5700 crore has been raised through SME IPOs. These figures are also very important What I am telling you in this report.
Apart from this, the committee is also proposing strictness in the rules for the companies bringing IPO. Let us talk a little about this also.
SEBI has proposed to impose a limit on the offer for sale of companies launching SME IPO or limit it from 20% to 25%. For the SME IPO to be considered successful, it has been suggested that the minimum number of offers should be 200. who is still 50.
It has been proposed to appoint a monitoring agency for the IPO at the time of Rs 20 crore to Rs 25 crore. Which is currently applicable on issues up to Rs 100 crore.There is a proposal to make IPTA at least Rs 3 crore in the last 2 years before the issue of the same.
SEBI has issued a consultation on the new rules of SME IPO and has also sought suggestions on its practices. It is believed that this may change for SME IPOs by the end of December after the suggestion comes. What will change after this change or will everything become clear in the times to come.
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