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RBI study links SME IPO boom to surging retail flows and quick listing reversals
RBI analysis showed FY24–FY25 SME IPOs saw huge retail participation and fast listing gains but frequent reversals, prompting SEBI to consider tighter disclosure and surveillance frameworks for smaller listings.
An RBI bulletin study found that India’s SME IPO segment recorded high oversubscriptions and strong listing gains through FY24–FY25 driven by retail investors and smaller broking networks. Over 80% of SME issues saw double-digit first-day returns, though many reversed within two weeks. The report warned that illiquidity and valuation risks remain elevated. SEBI is studying enhanced disclosure norms and post-listing surveillance measures. Analysts view the findings as validation of the need for longer-term holding discipline as retail participation continues to rise in India’s expanding capital-markets ecosystem.