SEBI proposes lower costs and easier rules for SME IPOs

SEBI has tabled amendments to the IPO framework that target small and medium enterprises. The regulator wants to cut the cost of raising capital for these firms. Under the proposal the minimum amount an investor can apply for will be reduced, though the exact new figure is not disclosed. By cutting the application floor, small savers can participate with just a few thousand rupees. The underwriting rules will also be relaxed, allowing issuers to rely on fewer or smaller underwriters and trimming commission fees. Companies whose market capitalisation falls within the thresholds set by SEBI will qualify for the softer terms. A further change introduces a one‑share trading lot for securities of listed SMEs, replacing the usual multiple‑share minimum. A single‑share lot means investors no longer need to buy blocks of 100 or 500 shares. The move is expected to make SME listings more accessible to retail investors. SEBI believes the steps will broaden participation and improve liquidity in the SME segment. SEBI expects these steps to raise the number of SMEs that go public and deepen the market. ## Context The SME IPO platform lets smaller firms raise money from the public, but high entry costs have limited investor interest. Reducing the application amount and allowing one‑share trades lowers the barrier for everyday investors, which can boost funding for growing businesses.