Mumbai: The Securities and Exchange Board of India (SEBI) has issued an advisory to investors regarding the risks associated with investing in securities of companies listed on the Small and Medium Enterprises (SME) segment of stock exchanges.
This advisory comes amid growing concerns over the integrity of information and practices surrounding these companies.
The SME platform, launched in 2012, has played a role in providing emerging businesses with an alternative avenue for raising funds. Over the past decade, the platform has facilitated the raising of over Rs 14,000 crores, with approximately Rs 6,000 crores being raised in the fiscal year 2024 alone.
Despite the platform's success in fostering capital for SMEs, SEBI has identified troubling practices among some companies and their promoters.
Post-listing, certain entities have been observed engaging in activities that create a misleadingly positive portrayal of their operations. These practices include public announcements and corporate actions such as bonus issues, stock splits, and preferential allotments, which often lead to a surge in investor interest and inflated stock prices.
SEBI issues advisory to caution investors against misleading practices in SME securities
The advisory addresses concerns over manipulative practices that create misleading optimism, urging investors to exercise caution and rely on verified information when making investment decisions.
TAug 28, 2024, 02:26 PM
