Mumbai, Mar 11 (KNN) The Small and Medium Enterprises (SME) stock segment is facing downward selling pressure in response to remarks made by SEBI Chief, Madhabi Puri Buch, regarding manipulation observed in various stocks.

Addressing concerns about potential manipulation on the side-lines of an event, Buch stated, “We do see signs of manipulation in the SME segment. The market has given its feedback. We are working on robust evidence and feedback for action.”

As a result of Buch's remarks, the S&P BSE SME IPO index tumbled by 2.3 per cent to 56017.74, reported ET.

Notable declines were observed in shares of companies such as Resgen, Pace E-Commerce Ventures, Navoday Enterprises, Captain Technocast, Kahan Packaging, and AA Plus Tradelink, which dropped by 6-14 per cent.

Buch emphasised SEBI's ongoing surveillance of price manipulation instances in IPOs, hinting at potential disclosures for SME IPOs to address the issue.

The SME segment witnessed a surge in public offers over the past year, with numerous offerings receiving overwhelming responses from retail and non-institutional investors.

Over the last year, the S&P BSE SME IPO index surged by 127 per cent, outpacing the benchmark Sensex by a significant margin. Trendlyne data reveals that 40 companies made their stock market debut this year, with 30 originating from the SME segment.

Recognizing the exuberance in the SME segment, SEBI extended its trade-for-trade settlement framework and short-term additional surveillance measures (ASM) to include SME stocks, effective from October 3, aiming to curb potential price manipulation.

Additionally, Buch raised concerns about the stretched valuations of small- and mid-cap stocks, along with significant inflows into mutual funds investing in these segments. SEBI has urged asset management companies to devise a framework to address these concerns.

(KNN Bureau)