The National Stock Exchange of India (NSE) has introduced a new regulation to standardize price discovery during the pre-opening session for Small and Medium Enterprises (SME) Initial Public Offerings (IPOs). Effective immediately, the NSE will implement a 90% cap over the issue price during the special pre-open session for SME IPOs.
In a circular issued today, the NSE stated, "To standardize the opening price discovery/equilibrium price across exchanges during the special pre-open session for initial public offerings on the SME platform, it has been decided to put an overall capping up to 90% over the issue price for SME IPOs." This new rule aims to ensure consistency across exchanges and mitigate excessive volatility in the opening price of SME IPOs.
This price control cap specifically applies to the SME segment and does not extend to Mainboard IPOs, relisted securities, or public debt. The initiative is expected to bring greater stability and predictability to the SME IPO market, benefiting both issuers and investors by providing a more controlled and transparent price discovery process.
Please refer to the NSE circular dated July 4, 2024 for further information. Circular No. NSE/SME/62757
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