BSE Urges Investment Bankers To Strengthen Due Diligence For SME IPO Listings

New Delhi, Sep 26 (KNN) In a move to enhance the integrity of India's burgeoning initial public offering (IPO) market, BSE Ltd., the operator of the Bombay Stock Exchange, has called upon investment bankers to intensify their due diligence processes for Small and Medium enterprises (SME) listings, sources close to the matter report.

During a meeting on Tuesday, BSE Chief Executive Sundararaman Ramamurthy reportedly instructed bankers to implement more rigorous oversight measures. 

These include verifying the accuracy of financial data presented by IPO aspirants and conducting thorough on-site assessments of prospective listing candidates.

This directive comes in response to identified inconsistencies in the filing documents of several recent small-cap IPOs. The initiative aims to bolster standards within a segment of the market that has experienced a significant influx of retail investment, while simultaneously drawing regulatory attention.

The Securities and Exchange Board of India (SEBI), the country's market regulator, issued a cautionary statement in August regarding investments in small and medium-sized enterprises (SMEs). 

SEBI highlighted instances where companies and their majority stakeholders had allegedly misrepresented operational details.

Both BSE Ltd. and its primary competitor, the National Stock Exchange of India Ltd., operate dedicated listing platforms for smaller enterprises. 

These platforms have witnessed substantial growth in recent years, coinciding with a broader market uptrend. Some new listings have reported oversubscription rates as high as 400 times, underscoring the segment's popularity among investors.

(KNN Bureau)