The National Stock Exchange (NSE) has set a new limit for the listing prices of SME IPOs on its SME Emerge Platform.
As of July 4, 2024, the listing price cannot exceed 90% above the issue price. This rule is specific to SME IPOs and does not apply to Mainboard IPOs.
Reason for the New Limit
The NSE’s primary markets department issued a circular explaining the new 90% limit during the price discovery phase for SME IPOs in a special pre-open session on the SME Emerge platform.
This decision aims to address concerns about SME IPOs being listed at excessively high prices.
Recently, many SME IPOs have been listed at two to three times their issue price, providing multibagger returns to investors and raising regulatory concerns.
For instance, Shivalik Power was listed on the NSE Emerge platform at 211% above its issue price.
In 2024, 40% of SME IPOs gave more than double returns within six months, with some even offering multibagger returns.
This new limit is intended to curb such high listing prices and ensure more stability in the market.
This has raised concerns with the regulator, leading to the new listing price limit to prevent excessive pricing.
