182 Sme Companies Raised Over 4686 Crore Via The Ipo Route In This Past Year

WEB India's markets regulator SEBI says some small firms paint unrealistic picture post IPO

182 SME companies raised over 4,686 crore via the IPO route in this past year

Indias markets regulator SEBI has raised concerns about certain Small and Medium-sized Enterprises (SMEs) providing misleading information about their growth and profitability after flotation of their shares on the stock market.

Amid heightened investor interest in this sector, the Securities and Exchange Board of India (SEBI) has issued an advisory cautioning investors to exercise due diligence before investing in SME companies.

In the last decade alone, over Rs 14,000 crore has been raised through the SME platform of which more than 4,686 crore was raised by 182 companies in the past year alone.

According to SEBI, some small firms are painting an unrealistic picture of their financial health

SEBI has observed that certain SME companies are making exaggerated claims about their future prospects in order to attract investors.

Some companies are also resorting to "creative accounting" practices to improve their financial statements.

This has led to a situation where the market is not able to accurately assess the risks and rewards of investing in these companies.

Investors are advised to exercise caution before investing in SME companies

SEBI has advised investors to exercise caution before investing in SME companies.

Investors should carefully consider the financial statements of these companies and seek professional advice if necessary.

Investors should also be aware of the risks associated with investing in small companies, including the risk of losing their entire investment.

Here are some tips for investors who are considering investing in SME companies:

• Do your research. Before investing in any SME company, it is important to do your research and understand the company's business, financial condition, and management team.
• Seek professional advice. If you are not comfortable evaluating SME companies on your own, you should seek professional advice from a financial advisor or investment manager.
• Invest only what you can afford to lose. SME companies are risky investments, and you should only invest what you can afford to lose.
• Diversify your portfolio. Don't put all of your eggs in one basket. Diversify your portfolio by investing in a variety of asset classes, including stocks, bonds, and real estate.