An SME IPO is an Initial Public Offering where small and medium-sized enterprises (SMEs) raise capital by issuing shares to the public for the first time. These shares are listed on a special platform dedicated to SMEs, such as NSE Emerge or BSE SME.

Both individual investors and institutional investors can participate in an SME IPO. However, investors must adhere to the specific eligibility criteria set by the exchange.

SME IPOs are intended for smaller companies that don’t meet the large-cap market requirements. The regulatory requirements and costs are typically lower for SME IPOs compared to regular IPOs.

SMEs opt for an IPO to raise capital for expansion, reduce debt, increase brand visibility, or provide liquidity for existing stakeholders like investors and employees.

Yes, SME IPOs generally carry higher risks because the companies involved are smaller, have limited market presence, and are more susceptible to market fluctuations.