India’s SME (small and medium enterprise) capital market is heading for a regulatory reset. Recently, Tuhin Kanta Pandey, Chairman of the Securities and Exchange Board of India, indicated that the regulator is preparing a comprehensive consultation paper to overhaul the SME listing framework after noticing ongoing issues with trading liquidity, market making, underwriting costs, and migration to the main board.
The real test for SEBI, however, will not be whether it can make the segment stricter, but whether it can make it smarter, more liquid, and more credible without shutting genuine small companies out of public markets. Striking that balance will be no easy task.
