The capital markets regulator in Mumbai released a discussion paper detailing a comprehensive overhaul of guidelines for initial share sales by smaller enterprises. The suggested modifications seek to decrease total expenses tied to gathering funds via public offerings. These planned adjustments touch multiple operational areas for businesses seeking to list their shares on public exchanges.
Among the chief adjustments put forward, the minimum investment required for applications would drop by half. The regulator also suggested removing mandatory market making obligations and relaxing underwriting obligations to further ease the financial burden on issuers.
Under the revised framework, the lowest investment amount for prospective buyers would move down to one lakh rupees, compared to the previous two lakh rupees. Additionally, applicants would need to purchase a minimum lot value of twenty-five thousand rupees while submitting bids for at least four lots. A single share trading lot is also planned for securities already listed on the SME platform.
The existing rule requiring two lots per application with a total value exceeding two lakh rupees was noted by the regulator as potentially restricting participation. The agency stated this previous structure fails to properly balance investor access against the goal of securing substantive applications.
In place of current criteria tied to paid-up capital, the regulator introduced valuation thresholds alongside higher earnings requirements. Businesses possessing a post-issue market valuation reaching up to one thousand crore rupees would need to utilise the dedicated SME platform for listing.
Firms valued above one thousand crore rupees and up to four thousand crore rupees would gain the flexibility to select either the SME segment or the main board. Meanwhile, enterprises surpassing four thousand crore rupees in market value would face a mandatory requirement to pursue a main board listing instead.
Key numbers
- Minimum application amount: ₹1 lakh
- Minimum lot value: ₹25,000
- Post-issue market capitalisation threshold: ₹1,000 crore
- Valuation limit for platform choice: ₹4,000 crore
What a board might note
- How might the shift to a ₹1 lakh minimum application amount impact retail investor participation and liquidity for upcoming SME listings?
- What are the financial implications for a company valued between ₹1,000 crore and ₹4,000 crore when choosing between the SME platform and the main board?
- How will the removal of compulsory market making and the easing of underwriting rules alter overall capital-raising costs under the proposed Sebi framework?
Source: Economic Times Markets, 15 October 2026. This is a summary of a news report, published as general information. It is not legal, tax or investment advice.
This article is journalism and commentary. It is not a recommendation to buy or sell any security, and it is not professional advice. Read the full disclaimer.
