SEBI proposes changes to SME IPO rules, including ₹3 crore profit threshold, OFS norms
CNBC-TV18 1 hr ago·14 Oct 2026, 12:16 pm
The Securities and Exchange Board of India (SEBI) has proposed a major overhaul of the rules for Small and Medium Enterprises (SME) IPOs. The key changes include raising the average operating profit requirement to ₹3 crore and lowering the minimum application size to ₹1 lakh. Additionally, SEBI has suggested relaxing Offer-for-Sale (OFS) limits, reducing lock-in periods for promoters, and removing the mandatory requirement for market-making activities.
This shift is significant for retail investors as it aims to make the IPO market more accessible and less risky. By lowering the entry ticket size, more investors can participate in these smaller listings. The relaxation of lock-in periods and market-making norms could improve liquidity, making it easier to buy and sell shares after the listing. However, the higher profit threshold might filter out companies with weaker fundamentals, potentially protecting investors from overvalued issues.
Investors should monitor the final implementation of these rules. While the changes are designed to boost market activity, they also require careful evaluation of the underlying business quality. Watch for upcoming draft regulations and the response from SME companies to gauge how these new norms will shape the investment landscape.
Excerpt from CNBC-TV18
Published On Oct 14, 2026 | 17:46 IST Last Updated On Oct 14, 2026 | 17:46 IST SEBI has proposed sweeping changes to SME IPO rules, including a ₹3 crore average operating profit threshold, a lower ₹1 lakh minimum application, revised offer-for-sale limits, shorter lock-ins and the removal of compulsory market making.…Read the original at CNBC-TV18
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