The Liquidity Problem

Unlike mainline stocks, SME stocks trade in lots even after listing. If you want to sell, you must find a buyer for the entire lot, which can be difficult during market downturns.

Due Diligence Requirements

SME companies have relaxed reporting requirements compared to the mainboard. This means the investor must work harder to verify the financial claims made in the RHP.

Capital Requirements

Typically, a minimum investment of ₹1 Lakh to ₹1.4 Lakh is required for SME IPOs, making it a high-ticket entry game.