Description

NSE introduces a floor of 20% below issue price during special pre-open session for SME IPOs to standardize price discovery across exchanges.

Summary

NSE introduces a lower band (floor) of 20% below the issue price during the special pre-open session for SME IPOs on the NSE Emerge platform. This complements the existing upper cap of 90% above issue price to standardize opening price discovery across exchanges.

Key Points

  • Lower band (floor) set at 20% below issue price for SME IPOs
  • Upper band (cap) remains at 90% above issue price
  • Applies only to SME IPOs on NSE Emerge platform
  • Excludes Mainboard IPOs, relisted securities, and public debt
  • Aims to standardize price discovery mechanism across exchanges

Regulatory Changes

Price control mechanism for SME IPO special pre-open session now includes:

  • Upper Band (cap): 90% over issue price (existing)
  • Lower Band (floor): 20% below issue price (new)

Compliance Requirements

  • All NSE members must comply with new price control mechanism
  • Applies to trading activities in SME IPOs during special pre-open session
  • Limited to NSE Emerge platform transactions

Important Dates

  • Effective Date: August 4, 2025
  • Circular Date: July 30, 2025

Impact Assessment

This measure will provide better price stability and prevent excessive downward price movements during SME IPO listings. It standardizes the price discovery process across exchanges and provides more predictable trading ranges for market participants in the SME segment.

Impact Justification

Affects price discovery mechanism for SME IPOs on NSE Emerge platform