03 October,2026 06:26 PM IST | New Delhi | mid-day online correspondent
SEBI. Representational image. File Pic.
SEBI Whole-Time Member Kamlesh Varshney on Saturday said the capital market regulator has completed the blueprint of a second surveillance system to identify "bad elements" among listed companies with a view to delist these firms, while also identifying small IPOs that could result in losses for retail investors, reported news agency PTI.
"While we have a surveillance system where, on the live data, we catch manipulators, SEBI has been doing very well in that. We have almost completed a blueprint of our second surveillance system, which will identify these bad elements in the capital market amongst the listed companies, so that they can be delisted," Varshney said.
He added that the scope of listed entities also extends to companies seeking to enter the capital market, particularly through small initial public offering (IPOs).
"We have seen a lot of small IPO issues, which are not really (meant) to be there in the capital market, and they create losses to retail investors. So, we have to identify those players also. So, SEBI is working on that as well," he said.
He said the Securities and Exchange Board of India' (SEBI) efforts to increase the number of listed companies needs to be supported with a stronger emphasis on corporate governance and compliance, especially among small and medium enterprises (SMEs) before they tap the capital markets.
According to industry body Association of Investment Bankers of India (AIBI), the SME IPO segment has expanded significantly, with 267 issues in 2025 and 156 issues in 2026 year-to-date.
It noted that cumulative SME fundraising during 2016-2026 year-to-date was at Rs 39,849 crore, while the average SME issue size increased from Rs 8 crore in 2016 to Rs 45 crore in 2026 year-to-date.
"We also have to make sure that more and more companies get listed," Varshney said, adding that industry associations have a key role to play in reaching out to prospective issuers and preparing them for listing.
He pointed out there is significant headroom to increase the investor participation in the securities market, citing a survey that showed that only 9.5 per cent of Indian households are invested in the securities market, while 65 per cent are aware of it.
"This means there is a huge gap of 55 per cent of households who can invest if we reach out to them," he said.
However, he emphasised that the efforts to bring new investors into the market must be backed by measures to protect them from fraud.
"If at the very initial stage of the investment, if they are defrauded, that will be a very negative signal for the growth of capital market," he said.
He added that the market regulator has introduced measures and verification mechanisms aimed at preventing fraud and highlighted the need for market participants to identify and expose bad actors.
(With inputs from PTI)
