The Securities and Exchange Board of India plans to allow companies

Why in news

SEBI is proposing to expand the eligibility of companies for SME platform IPOs to increase investor participation and reduce costs for issuers.

Background

SEBI's primary market advisory committee discussed allowing companies with a market value up to Rs 4,000 crore to use SME platforms. The current limit is Rs 5 billion. Proposed changes include eliminating minimum trade sizes and removing underwriting requirements.

Facts for Prelims

• BodySEBI: The primary regulator for the securities and capital markets in India.
• FactProposed market value limit for SME platform IPOs: Rs 4,000 crore.
• FactCurrent market value limit for SME platform IPOs: Rs 5 billion.
• S&TUnderwriting: A process where a financial institution guarantees the sale of issued securities.

For Mains

Q. Discuss how simplifying the IPO process for Small and Medium Enterprises (SMEs) can contribute to deepening the Indian capital markets and fostering entrepreneurship.

Dimensions to cover in your answer

• Ease of doing business
• Capital formation for SMEs
• Investor protection vs. market accessibility
• Impact on liquidity

Keywords: Capital formation · Market liquidity · Ease of doing business · Investor participation · Regulatory overhaul

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