Why is SME IPO price too high?

SME IPO prices may appear high, but they are determined based on the company’s potential and are structured to attract serious investors rather than very small retail participants. Key reasons include:

• Growth-based Valuation: SMEs are often priced on their future potential and industry prospects rather than only past performance.
• Smaller Issue Size: Limited share supply and lower float can push valuations upward.
• Targeted Investors: With a minimum application size of around ₹1–2 lakhs, pricing is designed for investors with adequate capital and risk appetite.
• Market Demand: Strong demand and peer comparisons can also influence pricing at the higher end of the band.