Amid certain SME companies resorting to share price manipulation by projecting an unrealistic picture of their operations, Sebi on Wednesday cautioned investors against putting their money in scrips of such firms.
Sebi, in a statement, said it has come to its notice that post-listing, some of the SME companies or their promoters have been making public announcements that create a positive picture of their operations. Such announcements are followed by various corporate actions like bonus issues, stock splits and preferential allotments.
The actions create a positive sentiment amongst investors, which induces them to purchase such securities. Simultaneously, this also presents an easy opportunity to the promoters to offload their holdings in such companies at elevated prices.
“Sebi urges investors to be careful and watchful of the aforesaid patterns and exercise caution while investing in such securities. Further, investors are advised to not rely on unverified social media posts and
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