In an unexpected move, the Bombay Stock Exchange (BSE) has postponed the listing of Trafficsol ITS Technologies Limited, an SME company that received an overwhelming 345 times subscription for its IPO. The small and medium enterprise IPO, which was highly anticipated, saw its Grey Market Premium (GMP) drop from 135% to 0% after the listing was put on hold.
The decision to delay the listing came after the stock exchange raised some questions about the company’s operations, marking the first time in recent history that a listing has been postponed post-IPO completion.
High Subscription, Sudden Halt: What Went Wrong?
Trafficsol ITS Technologies, operating in the SME sector, was set to make its debut on the BSE SME platform on Tuesday. However, after receiving concerns, the stock exchange decided to halt the listing process until all issues are clarified. This has left many investors surprised, especially since the IPO attracted a massive response, with bids amounting to 345 times the offering size.
The GMP, which initially soared by 135%, has now plummeted to 0%, leaving investors uncertain. The BSE announced this development through social media on the platform X (formerly Twitter), confirming that the listing would be delayed until further notice.
SEBI’s Recent Warning on SME IPOs
The Securities and Exchange Board of India (SEBI) had recently cautioned investors about the risks involved in SME IPOs, particularly due to unrealistic business projections. In August, SEBI issued warnings, and SEBI Whole-Time Member Ashwani Bhatia stated that stricter regulations are in the works, particularly in areas of auditor oversight and business monitoring.
This move by BSE aligns with SEBI’s broader efforts to protect investors from potential pitfalls in the SME sector. Tighter norms could soon be introduced, further enhancing scrutiny on SME IPO listings to ensure transparency and accuracy in business projections.
