IMPACT OF SEBI REGULATIONS ON SMES AND INDIAN STOCK EXCHANGE
AUTHOR – SHIVANI SHARMA, STUDENT AT AMITY UNIVERSITY NOIDA
BEST CITATION – SHIVANI SHARMA, IMPACT OF SEBI REGULATIONS ON SMES AND INDIAN STOCK EXCHANGE, ILE MULTIDISCIPLINARY JOURNAL, 4 (2) OF 2025, PG. 198-204, APIS – 3920-0007 | ISSN – 2583-7230
Abstract
The Indian Securities and Exchange Board of India (SEBI) regulations have played a crucial role in shaping the growth trajectory of startups and Small and Medium Enterprises (SMEs) in the Indian financial market. Over the years, SEBI has implemented a series of reforms aimed at facilitating the listing of these companies on the Indian Stock Exchange (BSE and NSE), providing them with better access to capital, liquidity, and enhanced visibility. This abstract explores the impact of SEBI’s regulations on the listing of startups and SMEs, focusing on the changes in policies, challenges, and opportunities for these businesses.
SEBI’s introduction of the “Startup Listing” and “SME Platform” initiatives has been a significant step toward enabling young and growing companies to raise funds from the capital market. These platforms offer lower listing costs, reduced regulatory requirements, and a simplified process for startups and SMEs, thus making the stock market a more accessible funding avenue. The SME [1]platform, in particular, helps smaller companies gain access to public capital markets while ensuring compliance with necessary regulations, providing them with a transparent route for growth.
The regulation of disclosures, financial reporting, and corporate governance standards has further strengthened investor confidence, while ensuring that these businesses operate in a manner that promotes fairness and accountability. The approval of SEBI’s guidelines has also emphasized investor protection by instituting stricter measures to safeguard the interests of retail investors.
However, despite these positive reforms, challenges remain for startups and SMEs in the process of listing. The cost of compliance, lack of awareness regarding market procedures, and the complexities of governance requirements often act as deterrents. Furthermore, the volatility and risks associated with smaller, less established companies make investors cautious, which can lead to under-subscription in IPOs and limited market interest.
Overall, SEBI’s regulations have brought significant improvements to the startup and SME[2] listing landscape in India. By reducing barriers to market entry, enhancing transparency, and fostering investor confidence, SEBI has created an ecosystem where these companies can scale, innovate, and contribute to the broader economy. However, continuous refinement of policies and enhanced support systems are essential to ensure that the benefits of these regulations are fully realized. Keywords: SEBI, SMEs, financial inclusion, stock exchange, market regulations.
[1] SME- Small and Medium Enterprise
[2] Berisha G., Pula J.S. (2015), Defining Small and Medium Enterprises: a critical review, Academic Journal of Business, Administration, Law and Social Sciences, Vol 1, No 1, IIPCCL Publishing, Tirana-Albania, p.17-28.