SEBI raises alarm on manipulation in SME segment

SEBI has observed that some SME companies and their promoters have been employing tactics to project a misleadingly positive picture of their operations. These tactics often involve making public announcements about favorable developments, followed by corporate actions like bonus issues, stock splits, or preferential allotments. This creates a false sense of optimism among investors, leading them to purchase the securities at inflated prices. However, the promoters may then capitalize on this momentum to offload their own holdings at a profit.