NEW DELHI: The National Stock Exchange (NSE) on Wednesday announced the implementation of a 20 per cent lower price cap – relative to the issue price – for SME IPOs during the special pre-open session.
The move will come into effect from August 4, 2025.
This follows the NSE’s earlier directive, dated July 4, 2024, which imposed a 90 per cent upper price cap above the SME IPO issue price for SME listings during the same session. Together, these two measures are aimed at tightening the price discovery range and preventing excessive volatility during SME IPO debuts.
The pre-open session is a brief window before market opening where the equilibrium (or opening) price is determined based on demand-supply dynamics. The new 20 per cent lower band means the opening price cannot fall more than 20 per cent below the issue price, while the 90 per cent upper cap restricts it from rising more than 90 per cent above the issue price.
For instance, for an SME stock issued at Rs100, the opening price on listing day can now range only between Rs80 and Rs190.
The NSE said these standardised caps will help ensure a more balanced and transparent price discovery process across exchanges, particularly given the often volatile nature of SME listings. The SME segment has seen a surge in investor interest, but also episodes of abnormal price swings on debut, prompting the need for tighter regulatory checks.
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