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SEBI raises alarm on manipulation in SME segment As on : 29-Aug-24  13:48

The Securities and Exchange Board of India (SEBI) has issued a cautionary advisory regarding investments in securities of companies listed on the Small and Medium Enterprises (SME) segment of stock exchanges.

SEBI has observed that some SME companies and their promoters have been employing tactics to project a misleadingly positive picture of their operations. These tactics often involve making public announcements about favorable developments, followed by corporate actions like bonus issues, stock splits, or preferential allotments. This creates a false sense of optimism among investors, leading them to purchase the securities at inflated prices. However, the promoters may then capitalize on this momentum to offload their own holdings at a profit.

SEBI has previously taken action against such entities, highlighting the recurring pattern of their deceptive practices. The regulator urges investors to be vigilant about these tactics and exercise caution when considering investments in SME securities. It advises investors to avoid relying on unverified social media posts or investing based on tips or rumors.

This advisory is intended to protect investors and ensure fair market practices in the SME segment.

The Small and Medium Enterprises (SME) platform, established in 2012, has provided a valuable avenue for emerging businesses to raise capital. Over the past decade, more than Rs 14,000 crore has been raised through this platform, with Rs 6,000 crores raised in FY '24 alone.

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