SEBI is preparing to tighten the regulations for SME IPOs

SEBI is preparing to tighten the regulations for SME IPOs after issuing a warning to investors about the unrealistic business forecasts presented by several small and medium enterprises. SEBI plans to release a discussion paper on the topic by the end of the fiscal year, as announced by SEBI's whole-time member, Ashwani Bhatia, at the Global Fintech Fest.

On Friday, Bhatia stated that the capital markets regulator intends to enhance the rules surrounding SME IPOs. This statement follows SEBI's recent caution to investors regarding overly optimistic business projections from various SMEs.

A discussion paper addressing these concerns will be published before the year’s end, Bhatia mentioned while speaking to reporters at the GFF (Global Fintech Fest). The proposed changes may involve enhanced monitoring and stricter oversight of auditors, with Bhatia emphasizing that diligent work by chartered accountants could help prevent issues.

Bhatia also highlighted that primary market issuances have already reached Rs 2 lakh crore in the first five months of the current fiscal year, compared to Rs 1.97 lakh crore for the entire FY24.

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