Record listing of SME IPOs on par with main board | News India

Ahmedabad: Along with institutional investors, retail investors are now also jumping on the IPOs of small and medium enterprises (SMEs). The subscription as well as listing gains of mainstream and SME IPOs coming one after the other is breaking records. The listing day profit of shares of SME companies has doubled in 2024.

Despite concerns raised by market regulator Sebi and market experts, the average listing day gain has nearly doubled to 72 per cent in 2024 from about 37 per cent in 2023. Compared to 2023, the number of stocks listed at more than 100 per cent premium has increased in 2024 and the number of stocks listed below the offer price or traded on the listing day has decreased.

According to Prime Database, out of the 172 stocks listed on the SME platform of the Bombay Stock Exchange and the National Stock Exchange so far this year, 29 stocks have given more than 100 per cent return on the first day. In comparison, out of the 179 stocks listed in 2023, 17 gave 100 per cent return on the first day. Also, 11 stocks closed below their offer price on the first day in 2024 as against 30 in 2023.

Infrastructure and renewable energy companies made the most gains on the listing day. Five of the top 10 biggest gainers on the first day in 2024 are infrastructure and power, particularly renewable energy companies. The prominent names include energy solutions company Vinsol Engineers, power solutions company KC Energy & Infra, solar power solutions company GP Eco Solutions India and aluminium and copper wire solutions company Divine Power Energy. These stocks rallied 280-420 per cent on the first day.

SEBI has been warning investors about irregularities in SME share prices for the last one year. Recently, strict orders have also been passed against some companies and promoters. SEBI said that some SME companies and their promoters are resorting to some methods that present an unrealistic picture of their performance. Such companies create a very positive image for their company through some advertisements and this gives the promoters an opportunity to sell their shares at a higher price.

Look at the listing gains