Investment bankers want the Securities and Exchange Board of India (SEBI) to allow anchor investors in public issues of small and medium enterprises (SMEs) while also enhancing the upper limit for paid-up capital of such companies to allow relatively larger firms to enter the capital market while ensuring institutional investor participation in the dedicated segment.
The segment for SMEs, unveiled separately by BSE and the National Stock Exchange (NSE) in 2012, has seen a lot of action with a more than 200 companies currently listed on the platform. While BSE has more than 170 companies listed on its SME segment, NSE has close to 50 entities on board.
Incidentally, the recent past also saw a few institutional investors participate in the segment but that has been far and few. Fund houses like Reliance Mutual Fund and DSP BlackRock Mutual Fund have invested in a few SME IPOs. Union Bank of India and SIDBI also invested in this segment, which saw a foreign investor participate once.
Merchant bankers said that if the segment receives a regulatory push then entities like banks, mutual funds, foreign institutional investors (FIIs) and financial institutions would subscribe to SME IPOs quite frequently.
Merchant bankers want the regulator to evaluate the option of allowing anchor investors in SME IPOs — as is the case with public issues on the
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