Sebi plans to ease many SME IPO rules, lower application amount
AgenciesSebi has also proposed to introduce a one share trading lot for SME listed securities.
The Securities and Exchange Board of India (Sebi) has proposed lowering the minimum application amount for SME IPOs to ₹1 lakh from ₹2 lakh, with a minimum lot value of ₹25,000 and a requirement to apply for at least four lots. It has also proposed to introduce a one share trading lot for SME listed securities.
"The existing requirement of two lots per application with a minimum application value above ₹2 lakh may limit participation and may not appropriately balance accessibility with the objective of ensuring meaningful applications," Sebi said in a discussion paper on Wednesday.
The regulator has suggested replacing the existing paid-up capital based eligibility criteria with market capitalisation thresholds and raising the minimum profitability requirement.
Under the proposed framework, companies with post-issue market capitalisation of up to ₹1,000 crore would be required to list on the SME platform.
Those valued above ₹1,000 crore and up to ₹4,000 crore could choose between the SME platform and the main board, while companies exceeding ₹4,000 crore in market value would have to compulsorily pursue a main board listing.