The National Stock Exchange (NSE) announced a new rule to cap the price of SME IPOs at 90% of their issue price during the pre-opening session.
The NSE stated in a circular, “To standardize the opening price discovery or equilibrium price across exchanges during the special pre-open session for SME IPOs, we have decided to impose a cap of up to 90% over the issue price.”
The 90% price control cap will apply exclusively to the SME segment, not to mainboard IPOs. This change, effective from July 4, will also exclude relisted securities and public debt.
What Happens Next?
The new rule is in effect as ofrom july 4, 2024. It will be interesting to see how it affects SME IPOs in the long run. Will it make these IPOs less exciting for investors? Or will it help to make the SME stock market fairer and more predictable?