Smaller size, fewer disclosures, light scrutiny make SME IPOs risky bets

Retail investors' listing day gains could vanish if market sentiment turns, causing losses

The market regulator recently halted the listing of shares of Trafiksol ITS Technologies, whose initial public offering (IPO) received bids worth Rs 10,000 crore and was subscribed 300 times, following investor complaints. At a business summit, Ashwani Bhatia, a whole-time member of the Securities and Exchange Board of India (Sebi), highlighted concerns about manipulation and fraudulent practices in small and medium enterprise (SME) IPOs. He spoke about promoters inflating their balance sheets and the lack of due diligence from auditors and the market ecosystem. All these developments raise the question: Should retail investors invest at all in