UPSC Prelims Practice Questions — SMEs unfamiliar with capital markets, lack intermediaries: SEBI
Q1. The Securities and Exchange Board of India (SEBI), which regulates the SME IPO framework, derives its statutory status exclusively from which one of the following?
- A. The Companies Act, 2013
- B. The Securities Contracts (Regulation) Act, 1956
- C. The SEBI Act, 1992
- D. The Depositories Act, 1996
Q2. With reference to changes introduced by the SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2025 vis-à-vis the pre-amendment regime, consider the following statements:
1. Before the 2025 amendment, an issuer was required to appoint a merchant banker for a rights issue; the amendment dispenses with this mandatory appointment.
2. The 2025 amendment doubles the minimum net worth requirement for Category II merchant bankers — who handle SME IPOs — from ₹5 crore to ₹10 crore.
3. The 2025 amendment raises the post-issue paid-up capital ceiling for the SME segment from ₹25 crore to ₹50 crore, beyond which migration to the main board becomes mandatory.
Which of the statements given above is/are correct?
- Before the 2025 amendment, an issuer was required to appoint a merchant banker for a rights issue; the amendment dispenses with this mandatory appointment.
- The 2025 amendment doubles the minimum net worth requirement for Category II merchant bankers — who handle SME IPOs — from ₹5 crore to ₹10 crore.
- The 2025 amendment raises the post-issue paid-up capital ceiling for the SME segment from ₹25 crore to ₹50 crore, beyond which migration to the main board becomes mandatory.
- A. 1 and 2 only
- B. 2 and 3 only
- C. 1 and 3 only
- D. 1, 2 and 3
Q3. Who, as the sole incumbent in 2026, heads the Securities and Exchange Board of India and has publicly flagged the absence of merchant bankers as a binding constraint on the SME capital market?
- A. Madhabi Puri Buch
- B. Tuhin Kanta Pandey
- C. Ajay Tyagi
- D. U.K. Sinha
Q4. With reference to the regulatory architecture of the SME capital market in India, consider the following statements:
1. The pre-listing process of SME IPOs is governed primarily by the SEBI (ICDR) Regulations, 2018.
2. Post-listing continuous obligations of SME-listed companies are governed by the SEBI (LODR) Regulations, 2015.
3. The administrative oversight of SEBI vests with the Ministry of Corporate Affairs.
4. A company listed on the SME segment whose post-issue paid-up capital exceeds ₹25 crore is required to migrate to the main board.
Which of the statements given above is/are NOT correct?
- The pre-listing process of SME IPOs is governed primarily by the SEBI (ICDR) Regulations, 2018.
- Post-listing continuous obligations of SME-listed companies are governed by the SEBI (LODR) Regulations, 2015.
- The administrative oversight of SEBI vests with the Ministry of Corporate Affairs.
- A company listed on the SME segment whose post-issue paid-up capital exceeds ₹25 crore is required to migrate to the main board.
- A. 3 only
- B. 1 and 3
- C. 2 and 4
- D. 1, 2 and 4
Q5. The administrative oversight of SEBI — the regulator that operationalises the SME IPO and merchant-banker framework — is vested in which one of the following ministries/departments of the Government of India?
- A. Department of Economic Affairs, Ministry of Finance
- B. Ministry of Micro, Small and Medium Enterprises
- C. Ministry of Corporate Affairs
- D. Department of Financial Services, Ministry of Finance