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Informist, Monday, Sep 2, 2024

 

--SEBI Bhatia: Merchant bankers, bourses must say 'no' to select SMEs

--CONTEXT: SEBI Whole-time Member Bhatia at CII Financing 3.0 Summit

--SEBI Bhatia: Intermediaries must temper IPO expectations of SMEs

--SEBI Bhatia: Seen some SMEs take short cuts, inflate balance sheets

--SEBI Bhatia: In recent past, checks in SME listings simply not there

--SEBI Bhatia:SME paper to tinker with norms for bourses, invest banker

--SEBI Bhatia: Consultation paper on SME listing process soon

 

MUMBAI – Listing on stock exchanges has aided in equity infusion in medium, small, and micro, enterprises in the economy, but the intermediaries involved in getting them into the securities market ecosystem must learn to say "no" to potentially problematic issuers, according to Securities Exchange Board of India Whole Time Member Ashwani Bhatia.

 

It has been observed that in some cases, SMEs offer chartered accountants and merchant bankers fees as high as 25% of the initial public offer issue size, Bhatia said speaking at the Confederation of Indian Industry Financing 3.0 Summit here today. These intermediaries must learn to say "no" to such potential issuers and temper their expectations. In the recent past, there has simply been no checks and balances, Bhatia said.

 

SEBI has passed some enforcement orders in some cases recently, Bhatia said. Companies looking to tap the SME primary market avenue must know that if they take shortcuts, inflate their balance sheets, or any other such thing, then their relationship with the securities market will be short-lived, Bhatia said.

 

The market regulator will soon come out with a consultation paper on the SME listing process, Bhatia said on the sidelines of the event. "The consultation paper will propose tweaks for SME IPO norms pertaining to stock exchanges, merchant bankers, and others," he said.

 

Reported by Rajesh Gajra

Edited by Saji George Titus

 

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