**SME Market Oversight: Tighter Controls Amid Growth** The Indian SME IPO landscape is undergoing a significant regulatory overhaul. Sebi Chairperson Tuhin Kanta Pandey recently flagged serious concerns regarding the misuse of regulatory relaxations. Authorities have identified instances where funds were diverted to related parties or shell companies. To manipulate market sentiment, some entities also engaged in unfair trade practices. In response, the regulator is reviewing the Listing Obligations and Disclosure Requirements (LODR) to eliminate ambiguity and strengthen investor safeguards. **Surging Capital Inflows** Despite these governance challenges, the SME segment has shown immense scale. In the current financial year (FY26) through January 31, 2026, 232 SME IPOs have already raised ₹10,500 crore. This follows a strong FY25, where 241 issues garnered ₹9,800 crore. The combined market capitalization of the over 1,400 SMEs listed on the NSE Emerge and BSE SME platforms has reached approximately ₹4.1 trillion. This growth highlights the platform’s role as an "escalator" for small businesses, with over 350 companies successfully migrating to the main board. **New Listing Barriers and Standards** To filter out low-quality issuers, Sebi has introduced stricter entry barriers. Companies must now demonstrate a minimum operating profit (EBITDA) of ₹1 crore for at least two of the three preceding financial years. Further tightening measures include: - A 20% cap on the Offer-for-Sale (OFS) component of an IPO. - A 15% cap on funds used for General Corporate Purposes (GCP), or ₹10 crore, whichever is lower. - Absolute prohibition on using IPO proceeds to repay loans from promoters or related parties. **Transparency and Digital Reform** A new "one-stop" digital portal is being developed to simplify compliance and provide clearly mapped guidance for issuers. Additionally, Sebi plans to open local offices in state capitals to improve access for regional businesses. Disclosure requirements have also been sharpened. Issuers are now required to provide independent verification for financial projections and use geotagged, timestamped photographs for site visits. To curb short-term speculation, the minimum application size remains high, typically around ₹1 lakh to ₹2 lakh, focusing on serious retail and institutional participation. **Current Market Activity** The market remains highly active as of February 12, 2026. While the Nifty 50 recently tested the 25,900 level, the SME segment saw multiple listings this week. Biopol Chemicals and PAN HR Solutions are set to list on February 13, following subscription levels that saw Biopol oversubscribed by more than 20 times. Meanwhile, new issues like Marushika Technology have opened for bidding, maintaining the momentum of one of the busiest starts to a year in Indian market history.