Sebi said to push for tighter scrutiny of SME listings
Indian stock exchange operator BSE Ltd. has told bankers to increase their oversight of the initial public offering applications of small companies, after the exchange found discrepancies in the filing documents of some recent deals, according to people familiar with the matter.
Sundararaman Ramamurthy, the BSE’s chief executive, told bankers on Tuesday to ensure IPO hopefuls aren’t inflating their numbers, the people said, requesting not to be named because they aren’t authorized to talk about the meeting. He also asked them to put more effort into assessing potential listing candidates in-person, including by visiting the companies’ premises, they said.
The move is an attempt to improve standards in a segment of India’s booming IPO market that has attracted a surge of retail investment, but that has also alarmed regulators. India’s market regulator said in August that investors should exercise caution when buying the shares of SMEs, adding that some companies and their majority stakeholders had misrepresented their operations.
A spokesman at BSE Ltd. didn’t immediately respond to emailed queries on the discussions
BSE Ltd., operator of the Bombay Stock Exchange, and its larger rival the National Stock Exchange of India Ltd. both run listing platforms for very small companies. Demand for these deals has boomed in recent years, alongside a wider market rally, with some new listings seeing oversubscription of as much as 400 times.
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