BSE SME IPO Index Courts Bear Hug; Falls 20 Percent

New Delhi, Feb 11 (KNN) The BSE SME IPO index has officially entered bear market territory, marking a significant reversal from its unprecedented rally. The index, which tracks small and medium enterprise initial public offerings, has plummeted more than 20 per cent from its all-time high of 122,298 reached on January 6, 2025, to currently trade at 95,553.

This decline comes after the index dominated performance charts across global and domestic markets for several years.

The current downturn follows an exceptional period of growth that saw the index deliver remarkable returns over four consecutive years. The gauge surged 147 per cent in 2024, building upon a 96 per cent gain in 2023.

Prior to that, it recorded a 43 per cent increase in 2022, preceded by an extraordinary 1,103 per cent rally in 2021.

Market analysts attribute this correction to broader headwinds facing Indian markets, including persistent foreign investor outflows.

Concerns about decelerating economic growth, underwhelming corporate earnings, and mounting global trade uncertainties have contributed to the bearish sentiment.

The Securities and Exchange Board of India (SEBI) recently issued a cautionary advisory to investors regarding the SME segment, emphasising the importance of due diligence and warning against making investment decisions based on speculative social media recommendations or unverified information.

The deteriorating market conditions are reflected in recent listing performances. In 2025, more than 20 companies have debuted in the SME segment, with half trading below their initial offering prices and another quarter showing minimal gains.

The situation appears even more concerning when examining 2024's listings. Of the 247 SME companies that went public last year, 79 currently trade below their issue prices, while 24 others have generated only marginal returns.

Furthermore, all 12 SME IPOs that doubled on their debut day in 2024 have since surrendered those gains, and approximately 60 listings that initially posted gains between 10 per cent and 90 per cent are now trading either flat or at a discount to their issue prices.

(KNN Bureau)