Aurelia Menezes Highlights Critical Concerns Over Due Diligence in India’s SME IPO Surge in an article by Business Today

Posted On - 11 June, 2024 • By - King Stubb & Kasiva

In a recent article published by Business Today, Aurelia Menezes has brought to light pressing concerns regarding the swift increase in SME (Small and Medium Enterprises) IPOs in India. Her analysis underscores the potential risks posed by this accelerated pace of IPO launches, particularly emphasizing the necessity for rigorous due diligence processes.

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Aurelia pointed out a critical issue that could emerge from the current trend: the potential compromise in the due diligence process. She stated, “This may lead to a compromise in the due diligence process, potentially bringing lower-quality companies to the market.” This statement reflects a growing apprehension that the rapid introduction of SME IPOs might not allow for the comprehensive examination of a company’s financial health and business prospects.

The meticulous process of due diligence is essential to ensure that only companies with sound financial standing and robust business plans enter the public market.  She warns that a lapse in this process could result in lower-quality companies being listed, thereby increasing risks for investors and potentially undermining market confidence.

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