In the dynamic world of finance where opportunities abound and risks lurk, a momentous decision has emerged to reshape the landscape for micro-cap stocks in India. The Securities and Exchange Board of India (SEBI), in a collaborative effort with the esteemed National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), has unfurled a groundbreaking revision to the Enhanced Surveillance Measure (ESM) framework. This remarkable move signifies a giant leap forward, not just for market liquidity, but for the nurturing of growth opportunities that lie within the realm of micro-cap companies.
As investors, analysts and entrepreneurs await the transformative effects of this strategic stride, it's time to delve into the heart of this momentous decision and its potential impact on the financial horizon. In a bid to address the challenges posed by high volatility in the realm of ‘micro-small’ companies, SEBI introduced the Enhanced Surveillance Measure (ESM) framework. These companies, characterised by a market capitalisation of less than ₹500 crore, are now subject to stringent monitoring under this framework. SEBI employs two key parameters, namely high-low price variation and close-to-close price variation, to carefully shortlist securities that fall under the purview of this regulatory measure.
This story is from the July 31, 2023 edition of Dalal Street Investment Journal.
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This story is from the July 31, 2023 edition of Dalal Street Investment Journal.
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