Comment on SEBI Amends IPO Norms to Revamp SME Listing Regulations by Makarand M Joshi, Founder Partner, MMJC and Associates
Below the Comment on SEBI Amends IPO Norms to Revamp SME Listing Regulations by Makarand M Joshi, Founder Partner, MMJC and Associates
Draft red herring prospectus pertaining to IPO on small and medium enterprises segment, which was till now cleared by stock exchange, would now be available for public comment on SME exchange, website of issuer and merchant banker to the issue. Public would be made aware by way of a public advertisement that SME IPO DRHP is available for public comments. This would allow the public at large to submit comments or raise complaints on draft red herring prospectus of companies going for IPO on small and medium enterprises segment.
Further SEBI has increased min. Application size for SME IPO to two lots making entry stricter to avoid unnecessary speculation in SME IPO. This would help protect the interest of gullible investors who generally invest looking at escalating share prices.
SEBI has also reduced the threshold for monitoring of SME IPO proceeds to 50 crore due to which more SME IPO would have to account for usage of funds. Further SEBI has clearly stated that usage of IPO funds for repayment of loan from related parties would not be allowed to float IPO. This would help ensure channelizing of funds for productive use and ultimately benefit investors.
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