The Bombay Stock Exchange (BSE) has postponed the Solar91 Cleantech IPO, which was supposed to open for investors tomorrow, due to some concerns raised in the media. The exchange stated that the delay is necessary for further investigation of these concerns. As a result, the IPO bidding for both anchor investors and the public is now on hold until further notice.
This delay comes after tighter rules were introduced for small and medium-sized enterprises (SMEs) launching IPOs. These new rules aim to reduce the risk of manipulation and ensure more transparency in these smaller offerings, which often have fewer disclosure requirements compared to larger companies. The Securities and Exchange Board of India (SEBI) has been working to improve the quality of SME IPOs, particularly addressing issues like governance and how funds raised from these offers are used.
Solar91 Cleantech, which focuses on providing solar energy solutions to businesses, was planning to raise ₹106 crore through its IPO. The price range for the shares was set between ₹185 and ₹195. However, this delay highlights the increased scrutiny of SME IPOs to ensure investor protection.
As part of the new rules, companies applying for SME IPOs now need to show a profit of ₹1 crore for at least two of the last three years. Additionally, they can only sell up to 50% of their shares in the IPO. SEBI has also restricted the use of IPO funds, ensuring that the money raised is directed towards the company’s growth, not to pay off loans or debts owed to company insiders like promoters or directors.