Breaking Down the NSE's Latest Move to Regulate SME IPOs - National Stock Exchange
The NSE has placed a 90% cap on the opening price for SME IPOs, or Initial Public Offerings for Small & Medium Enterprises. Confused? Let me explain. Previously, SME IPOs were often listed at very high premiums. For example, Divine Power had an IPO price of 40, but it got listed at a 280% premium. Now, with this new cap, the opening price limit is set to 90%, meaning no SME IPO can be listed at a premium above 90%.
But what will this change? If there's demand for a stock, it will still hit the upper circuit even after a 90% premium. This new rule isn't going to be very effective because it's just a corrective measure. Instead, the NSE should focus on preventive measures, such as requiring SME companies to provide detailed information. For more Indian Stock Market news, subscribe to Planify!
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