Small and medium enterprise IPOs have faced a tough year. Out of 161 SME listings that raised ₹7,171 crore, nearly 50% are trading below their issue price and 24 have lost more than half their value. The median return for SME IPOs is down 0.2%, while mainboard listings have gained 24%.
During July to September, SME issues showed a median return of –0.7%, with 52% below their offer price. The Nifty SME Emerge Index fell 2.63%, whereas the Nifty IPO Index gained 10.5%. Experts say investors prefer larger mainboard IPOs such as NSE, which are considered safer and more profitable.
Rising costs have also hurt SME issuers, with expenses climbing to 10–12% from 7% earlier. Despite weak performance, activity remains strong. September saw 52 SME IPOs worth ₹2,078 crore, the second highest since January 2020. Analysts believe smaller firms face valuation pressure and fatigue may slow October listings.
Mainboard IPOs continue to attract investors with better returns and stability, leaving SME offerings struggling to regain momentum in a challenging market.
