look news india
The National Stock Exchange's (NSE) decision to impose a 90 per cent cap on the issue price in a special pre-open session for initial public offerings (IPOs) of small and medium enterprises (SMEs) comes at a time when there are concerns about oversubscription and excessive money pouring into the segment.
As of June 2024, about four IPOs were listed at a hefty premium of 300 per cent to 400 per cent. Also, the problem of oversubscription is also creating new records. The latest example of this is HOAC Foods. Which was subscribed 1,834 times and the retail investor portion 2,350 times. The increasing incidence rate of SME IPO listings with excessive leverage is shocking.
In the first six months of 2024, 39 per cent of the 117 IPOs in the SME sector were listed, an increase of 90 per cent. Whereas in 2023, only 16 per cent of SME IPOs achieved this figure. In the last one year, the SME IPO index has increased by 271 per cent to 99,134.40 points. As against which the BSE Sensex has increased by 22 per cent. While the BSE Smallcap Index has increased by 64 per cent.