SME IPO Index Surpasses 100,000 Mark, Outpacing Sensex Milestone

New Delhi, Jul 8 (KNN) The BSE SME IPO index has reached the 100,000 milestone, a feat yet to be achieved by the broader Sensex, which is still anticipated to hit this mark in the next one to two years.

This development underscores the remarkable growth in India's small and medium enterprise (SME) public offerings, driven by increasing investor interest.

Over the past five years, the SME IPO market has experienced exponential growth, with a staggering increase of over 5000 per cent. The current year alone has seen a surge of more than 100 per cent.

This boom, particularly pronounced in the post-COVID-19 era, coincides with a rise in retail investor participation and a heightened appetite for risk in smaller company investments.

Since April 2020, India has witnessed nearly 500 SME IPOs, raising approximately Rs 12,500 crore, according to data from Zerodha. The market has seen strong investor response, reflected in high subscription rates and substantial listing gains.

This trend has encouraged more small companies to enter the public market, regardless of broader market conditions.

In the current year, 110 companies have listed on SME platforms across both major exchanges, with numerous multibagger listings. The past two months alone have seen 10 such high-performing debuts.

Market analysts suggest that the SME segment has transitioned from a niche market to a mainstream asset class for investors. However, this rapid growth has not gone unnoticed by regulators, who are increasingly concerned about investor safety and potential price manipulation.

In response to these concerns, regulatory bodies are implementing more stringent checks to ensure market stability.

The Securities and Exchange Board of India (SEBI) has flagged multiple instances of potential market froth and is introducing measures to prevent manipulation.

Recently, the National Stock Exchange (NSE) imposed a 90 per cent cap in the pre-open price discovery session for SME IPOs.

As the SME IPO market continues to evolve, it remains to be seen how these regulatory measures will impact its growth trajectory and investor sentiment in the coming months.

(KNN Bureau)