SEBI Alert : The Securities and Exchange Board of India (SEBI) on Wednesday warned investors against investing their money in shares of such small and medium companies (SMEs) that manipulate the share price by presenting a false picture of their operations. SEBI said in the statement that it has come to notice that after listing, some SME companies or their promoters are making such announcements, which create a positive image of their operations. After such announcements, various corporate actions like bonus issues, share splits, and preference shares are taken.

Keep these things in mind before investing

These steps create a positive perception among investors and motivate them to buy such securities. At the same time, this also provides an easy opportunity for promoters to sell their stake in such companies at higher prices. SEBI has said that investors are urged to be careful about the above methods and exercise caution while investing in such securities. Apart from this, investors are advised not to trust unverified social media posts and not to invest based on tips and rumors.

Recently SEBI has passed orders against such units. It can be seen that the modus operandi of these units is broadly similar to the methods mentioned above.

SME platform was started in 2012

The SME platform of the stock markets was launched in 2012 to serve as an alternative source of raising funds for emerging companies. Since then, the number of SME issuances has increased as well as investor participation in such offerings. Over Rs 14,000 crore has been raised through this platform during the last decade, of which about Rs 6,000 crore was raised during the last financial year (2023-24) alone.

Recently, the Rs 12 crore initial public offering (IPO) of Resourceful Automobiles, a Delhi-based company with just two outlets and eight employees, received bids worth about Rs 4,800 crore. The company's IPO was open for subscription from August 22-26. It received an overwhelming response and received bids for 40.76 crore shares against the 9.76 lakh shares offered. It was a total subscription of 419 times till the third day of the bidding process.