Warning: Investors to invest cautiously in SME stocks-SEBI

Amid attempts by some SME companies to lure investors by making unrealistic portrayals of their performance, SEBI has issued an advisory to investors to be cautious before investing in such companies. According to SEBI, it has come to their notice that some SME companies or their promoters make some announcements after listing to show a positive picture of their performance. This includes announcements like bond issue, stock split or preferential allotment. This type of advertisement creates a positive sentiment among investors, which attracts them to invest in these types of shares. Along with this, it also provides an opportunity for promoters to reduce their holdings in such companies at a higher price. SEBI has requested investors to exercise caution and be cautious while investing in such patterns and investments. SEBI advised investors not to rely on unverified social media posts and not to invest based on tips or rumours. An order has been issued against such companies. Why SEBI Issued Advisory SEBI has issued this advisory for investors because of the IPO of Resourceful Auto Mobile some time ago. In which the company's IPO received more than 400 times subscription, which surprised everyone.

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