SEBI Proposes Overhaul of SME IPO Listing Rules

The Securities and Exchange Board of India released a consultation paper on October 14, 2026, proposing a comprehensive overhaul of the framework governing initial public offerings for small and medium enterprises. The regulator aims to ease access to capital markets, lower fundraising costs, and enhance investor safeguards.

Under the proposal, companies with a market value up to 10 billion rupees ($105 million) must use small- and medium-enterprise platforms for their IPOs. Firms valued between 10 billion and 40 billion rupees will have the choice to list on either the main board or the micro-listing venue. The regulator also suggests shifting eligibility criteria to post-issue market capitalization and raising the average annual operating profit requirement to 3 crore rupees over three years.

To increase participation, the proposal includes reducing the minimum application amount to 1 lakh rupees and increasing the minimum number of allottees to 500. Additionally, the regulator proposes removing compulsory market making and mandatory 100 percent underwriting for SME IPOs, while ending reverse migration from the main board to SME platforms. Public comments on these changes are open until November 4, 2026.