NSE Caps Listing Day Pre-Open Price Discovery For SME IPOs At 90%

The National Stock Exchange has placed an overall cap of 90% over the issue price of small and medium enterprises' initial public offerings during listing, to curb huge movements in the scrip's prices. The change will be effective July 4, 2024.

India's biggest stock exchange set the overall capping in order to standardise the opening price discovery or equilibrium price across exchanges during the special pre-open session, it said in a notice on Thursday.

The price control cap will apply only to the SME segment and not for mainboard initial public offerings, relisted securities and public debt, the exchange clarifies.

The markets regulator had previously said that it would look into additional disclosures due to patterns of manipulation in IPOs of small and medium enterprises.

"We do see patterns of price manipulation and certain patterns. The market has advised us on what to do to identify such cases and deal with them," Securities and Exchange Board of India's Chairperson, Madhabi Puri Buch, had said earlier.

SEBI is still working with advisors to understand and analyse the data. "It is easy to manipulate both at IPO and subsequent stage. Some more disclosure in terms of risk factors is needed," she had said.