The over-a decade-old SME platform, which has seen a notable exuberance over the past few years, may need to undergo significant changes in regulations to deal with manipulation and liquidity issues. The recent NSE circular capping the opening price of SME IPOs at 90% of the issue price may just be the beginning of a slew of changes that may be on the way, according to experts.

In fact, this is not the first time that the exchanges have tightened the screws on the SME platform. In September 2023, additional surveillance measures and trade-for-trade frameworks were extended to the SME segment to discourage speculative trading.

The SME segment has seen a tremendous growth in the last few years. The number of issues has risen from 59 in 2021 to 182 in 2023, and 117 in just over six months this year, according to PRIME Database. However, there have also been allegations of price manipulation, with a number of stocks getting listed at unimaginable returns of 300-400%.