BSE Managing Director and CEO Sundararaman Ramamurthy
The BSE has sought additional tightening within the guidelines and processes associated to SME IPOs and has made strategies associated to the position of service provider bankers, disclosure gaps and funds utilisation, all of that are into account by the Securities and Trade Board of India (SEBI), a prime change official mentioned.
BSE Managing Director and CEO Sundararaman Ramamurthy mentioned the SME fundraising framework has advanced steadily because the platform’s launch in 2012, however current traits and enforcement actions underline the necessity for sharper guardrails.
“Based mostly on expertise and suggestions, many adjustments have been ushered in suo moto by the change in addition to by the regulator. Now, for additional strengthening, sure points are underneath energetic consideration,” he advised businessline.
One proposal would require issuers to reveal personal preparations with service provider bankers on subject bills and funding to deliver extra transparency. The change has additionally mooted restrictions on SME investments by AIFs which can be associated to service provider bankers, to cut back conflicts of curiosity.
Service provider bankers’ management
An even bigger change might come within the dealing with of IPO proceeds. At current, service provider bankers management entry to escrow accounts the place funds are parked. SEBI has discovered a number of cases of misuse, together with in circumstances towards Synoptics Expertise, Varyaa Creations, and their bankers, and is at present probing almost 20 SMEs for related diversions, based on folks accustomed to the matter.
One other proposal pertains to changing the present deviation certificates with a extra detailed utilisation certificates, and mandating appointment of a monitoring company for all SME issuances to make sure higher management in utilisation of proceeds. Tighter eligibility norms for service provider banker registration are additionally on the desk.
Ramamurthy mentioned that these reforms are in keeping with the phase’s development. Since inception, the BSE SME platform has enabled over 615 corporations to lift about ₹11,300 crore, with greater than ₹8,100 crore mobilised in simply the final 5 years. “SMEs are an necessary complement to India’s development story. As their participation deepens, the fundraising framework should additionally evolve,” he mentioned.
Strict enforcement actions
To this point, round 186 corporations have migrated to the primary board, whereas 55 have been suspended or delisted. The enforcement and laws are getting stricter to advertise wholesome SME development and guarantee solely good corporations are available.
Ramamurthy mentioned that SMEs, in contrast to giant corporates, usually lack expertise in compliance and governance, which makes handholding by exchanges, regulators, and service provider bankers important. BSE, he mentioned, has tied up with state companies and trade our bodies to teach promoters on governance and disclosure practices.
He additional mentioned that SME IPOs are usually not meant for small retail buyers.
“This phase is designed for buyers who can assess dangers and anchor-type buyers who will keep invested for longer.”
The proposals, if accepted, would mark one other spherical of tightening of guidelines within the SME IPO house. The regulator has already tightened itemizing, eligibility, compliance, disclosures, and mainboard migration norms prior to now 12 months.
Revealed on September 14, 2025
