Kresha Gupta, StepTrade Founder & Director, Weighs in on SEBI’s Proposed Changes for the SME Exchange
In a recent feature on Business World, Kresha Gupta, Founder and Director of Steptrade Share Services, shared her expert opinion on a major change proposed by SEBI aimed at tightening regulations for the SME exchange. This move has the potential to reshape how smaller businesses raise capital and protect investors.
The Purpose Behind SME Exchanges: A Platform for Growth
Gupta started by highlighting the core purpose of the SME exchange, which was created to give smaller enterprises the chance to list, raise equity capital, and compete with larger corporations. She believes the SME exchange has been crucial in offering these businesses opportunities for growth and expansion. However, recent incidents of market manipulation have revealed gaps in the system, underscoring the need for stronger regulations.
SEBI’s Proposed Changes: A Step in the Right Direction
Among the most notable recommendations in SEBI’s consultation paper, Gupta strongly supports the proposal to limit the Offer for Sale (OFS) to 20%. She explained that this would prevent promoters from focusing on short-term personal financial gains and instead encourage them to stay committed to the long-term growth of their companies.
“A company that raises public funds depends heavily on the vision and dedication of its promoters, and their role is crucial to its success,” Gupta said.
Protecting Retail Investors: A Necessary Measure
Another important proposal that Gupta backs is the increase in the lot size for SME IPOs. This change aims to protect small retail investors, who may be more vulnerable to the inherent risks of investing in SMEs. “It’s vital to safeguard those who may not fully understand these risks,” Gupta remarked, emphasizing the importance of protecting the interests of individual investors.
A Brighter, Safer Future for SMEs
Gupta concluded by reiterating the significance of these proposed changes. With stronger regulations in place, the SME exchange will not only foster growth for smaller businesses but also ensure a safer investment environment for retail investors. Her insights show a deep understanding of the balance needed to support both business expansion and investor protection.
