look news india
Ahmedabad: Amid concerns over manipulation and fraudulent activities in the SME sector, market regulator Sebi's whole-time member Ashwani Bhatia has said that amendments are being introduced in the balance sheet for small and medium enterprises (SME) listing.
His comments come at a time when the market capitalization of SME companies has increased to Rs. 2 lakh crore and there is a huge craze among investors to buy shares during the IPO of this sector. There is not enough control over them due to the lack of proper monitoring by auditors and market system.
No SME refuses IPO listing even if their balance sheet grows. Auditors should be like good doctors. Auditors should not give them heavy medicines like steroids when they can survive with paracetamol.
SMEs should also look at other opportunities to raise funds through alternative funding before looking at the possibility of listing. He suggested that approaching angel investors is a better way than direct listing.
As of March, SEBI registered alternative investment funds had set aside Rs. 1,169 crore and Rs. 735 crore has been invested out of this. The exchanges have focused on the issue of listing of SMEs.
SEBI has recently adopted a strict approach to monitor SMEs and has issued orders against companies found using it for misappropriation of funds, price hike through fraudulent transactions, etc.