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The union budget for 2024 introduced a slew of changes that will directly impact your pocket in the days to come. FM Sitharaman brought about significant changes in how your capital gains were taxed. Take a look at how this will impact your pocket. First off, what are capital gains? Simply put, any gains or profits you make when you sell a capital asset like your properties, investments in stock or mutual funds and more is counted as capital gains. What sets capital assets aside is their ability to generate monetary value over a long period. Depending on the time period they are held for before they are sold, <keyword id="20584761" type="General" weightage="20" keywordseo="long-term-capital-gains" source="keywords">long-term capital gains</keyword> (LTCG) or <keyword id="20584760" type="General" weightage="20" keywordseo="short-term-capital-gains" source="keywords">short-term capital gains</keyword> (STCG) is applicable. So, what has changed? In one sharp move, <keyword id="19916618" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="keywords">Nirmala Sitharaman</keyword> pushed up the long-term <keyword id="20301441" type="General" weightage="100" keywordseo="capital-gains-tax" source="keywords">capital gains tax</keyword> from 10% previously to 12.5% now. Moreover, <keyword id="22142879" type="General" weightage="20" keywordseo="indexation-benefit" source="keywords">indexation benefit</keyword>, which reduced the total tax outgo from the investor's hands, also went away with these proposed changes. As for short-term capital gains tax, it was decreased to 15% from its previous rate of 20%. However, to ease the pain, the maximum exemption amount for long-term capital gains in a single year was increased from Rs 1,00,000 previously, to Rs 1,25,000 now. All listed securities will be considered long-term capital assets (and hence, LTCG will be levied) if they are held for a period of 12 months. For unlisted securities and other immovable properties, LTCG will be applicable post 24 months of holding them. Bonds, debentures and gold will have also have a holding period of 24 months, from the earlier duration of 36 months, in order to be eligible for long-term capital gains tax. What does indexation mean? Indexation allowed <keyword id="19900618" type="General" weightage="20" keywordseo="investors" source="keywords">investors</keyword> to account for inflation, by adding the same to their initial purchase price. This would result in a higher purchase price, significantly lowering the overall gains. But now, capital gains tax will be calculated at the actual purchase price (ouch!) with no scope to factor for inflation, which would mean a higher tax outflow from the investor's pockets. This benefit has been done away with for real estate and gold. Under indexation benefit, it is not your initial purchase, or acquisition price that is taken into consideration, but rather your indexed cost of acquisition that comes to play. This is calculated using the CII of the sale year and the purchase year. This helps in adjusting the purchase cost of your property for inflation when you are selling it. The government calculates and notifies the public of the CII (cost inflation index) every year. For instance, Aditya's father purchased a property worth Rs 40,00,000 in 2009 (FY2009-10). In 2004 (FY2024-25), he decides to sell this for around a crore. How will his tax liability be calculated? First, lets consider that he had indexation benefit. By that, his indexed cost of acquisition (there's a long formula to this) would be Rs 98,10,810, making his long-term gains at Rs 1,89,189. So, 20% of this would come down to Rs 37,837. But lets also consider if he did not have this indexation benefit. While indexation benefits have been done away with starting July 23rd, 2024, lets assume this rule came into effect at the very start of FY25, or 1st April, 2024. This would mean your total capital gain would be 12.5% of Rs 60,00,000, or a staggering Rs 7,50,000. What are the experts saying? Nilesh Sharma - President &amp; Executive Director, SAMCO Securities sees this as a double whammy which leaves much to be desired on the investors front. "It seems govt wants share in investors’ profit. At a time when the equity indices are at an all-time high, the government has tried to take a share out of the growth and the profits earned by the investors by increasing both the STT rates on derivatives and an increase in STCG and LTCG", he notes "The removal of indexation benefit for LTCG will also impact the real estate industry and will slow down the resale of residential flats /lands. There is a fear that it may also increase the proportion of cash transaction in real estate deals, which will be again be counterproductive. The government has not announced any major changes for the individual tax payers except a slight change in the tax slabs and a minor increase in the standard deduction. This too, is however applicable only in the new tax regime, leaving nothing for the tax payers who have opted for the old tax regime", continued Sharma. Palka Arora Chopra, Director, Master Capital Services Ltd notes that the removal of indexation benefits might negatively impact investor returns, leading to a short-term bearish outlook for the sector. "While the 25% increase in the Long-Term Capital Gains (LTCG) tax is manageable and not likely to deter investors significantly, the increase in short-term capital gains (STCG) tax from 15% to 20% could have a more pronounced negative impact in the medium term", she continued.

Decoding capital gains taxes: What FM Nirmala took from your pocket, what she gave you in Budget 2024

The Prime Minister’s Internship Scheme, announced in the Union Budget 2024-25, is set to offer a tremendous opportunity for young Indians to gain hands-on experience in leading companies across diverse sectors. As of October 12, the portal for this ambitious initiative is open for registrations, with over 90,000 internship positions posted by top companies like <keyword id="19896380" type="General" weightage="20" keywordseo="Reliance-Industries" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Industries" meta.hostid="261" meta.entityid="Reliance Industries">Reliance Industries</keyword>, <keyword id="19895995" type="General" weightage="20" keywordseo="HDFC-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Bank" meta.hostid="261" meta.entityid="HDFC Bank">HDFC Bank</keyword>, <keyword id="19950119" type="General" weightage="20" keywordseo="Tata-Consultancy-Services" source="keywords" meta.keywordsubtype="org" meta.entityname="Tata Consultancy Services" meta.hostid="261" meta.entityid="Tata Consultancy Services">Tata Consultancy Services</keyword> (TCS), ONGC, Maruti Suzuki, and more. Here’s everything you need to know about how to apply, the companies participating, and answers to frequently asked questions. <h2>Step-by-Step Guide to Applying for the <keyword id="23273918" type="General" weightage="100" keywordseo="PM-Internship-Scheme" source="keywords">PM Internship Scheme</keyword></h2><ol><li>Visit the Official Portal: The PM Internship Scheme’s application process takes place on the official website,<a href="http://pminternship.mca.gov.in"> pminternship.mca.gov.in</a>.</li><li>Register and Set Up Your Profile: After opening the portal, you’ll need to register and fill out basic information, including educational qualifications, age, and internship preferences.</li><li>Explore Internship Listings: With over 90,000 internships available from 193 companies, you can browse listings in sectors like Oil &amp; Gas, Travel &amp; Hospitality, Automotive, Banking, and more. Each listing will provide details on job roles, skills required, and specific fields like Operations Management, Production, Maintenance, and Sales.</li><li>Apply for Your Chosen Roles: You can apply for up to five internships based on your interests, qualifications, and preferred location. The portal allows for an easy application submission and lets you track your applications.</li><li>Confirmation and Next Steps: Once you apply, download the confirmation page for reference. Internships are set to begin on December 2, 2024, so selected candidates will receive further instructions as the start date approaches.</li></ol><h2>Major Companies Participating in the PM Internship Scheme</h2>Here are some of the top companies that have already posted internships on the portal, with more joining every day: <ul><li>Reliance Industries Ltd.</li><li>HDFC Bank</li><li>Tata Consultancy Services (TCS)</li><li>Oil and Natural Gas Corporation (ONGC)</li><li>State Bank of India (SBI)</li><li>Maruti Suzuki India Ltd.</li><li>Jubilant FoodWorks</li><li>Larsen &amp; Toubro Ltd.</li><li>Eicher Motors Ltd.</li><li>Muthoot Finance</li></ul>These companies are providing internships across over 20 fields, covering a wide range of skills and sectors. The biggest opportunities are currently in the Oil &amp; Gas sector, followed by industries like Travel, Automotive, and Financial Services. <div type="Article" hostid="261" msid="113986236" title="Why so many entry-level jobs aren&amp;#39;t entry-level" mstype="2" mssubtype="0"></div><h2>Key Features of the Internship Scheme</h2>Under the scheme, interns will receive a stipend of Rs 5,000 per month, plus a one-time grant of Rs 6,000 to support miscellaneous expenses. These internships are available across 737 districts in all 37 states and Union Territories, making this a truly inclusive national program. Interns can indulge in many diverse internship roles. From operations to maintenance, sales, marketing, and production, these internships offer a variety of hands-on experiences that match real-world corporate needs. <h2>FAQs about the PM Internship Scheme</h2><h5>Who is eligible?</h5>The scheme is open to Indian citizens aged 21 to 24 who are not employed full-time or enrolled in full-time study programs. Candidates in online or distance learning programs are eligible. <h5>What sectors offer the most internships?</h5>The largest number of internships are in the Oil &amp; Gas, Travel &amp; Hospitality, Automotive, and Banking &amp; Financial Services sectors, with positions also available in fields like Manufacturing, IT, and Retail. <h5>When do the internships start?</h5>Internships for this year will begin on December 2, 2024. The scheme aims to facilitate 1.25 lakh internships this financial year and eventually reach one crore internships over the next five years. <h5>What are the application deadlines?</h5>The portal is open from October 12 for candidates to start applying, with companies continuing to post positions as the scheme rolls out. It’s recommended to apply early, as some positions may fill up quickly. <div type="Article" hostid="261" msid="114029056" title="Read 5 résumés that helped techies land $300,000-plus jobs at Google, Meta, Amazon, and Salesforce" mstype="2" mssubtype="0"></div>

PM Internship Scheme finally launched — here’s how you can apply to work with Reliance, TCS, SBI and more!

<ul><li>LTCG of up to Rs 1,20,000 in a single financial year is tax-free. </li><li>Effective July 23rd, 2024, <keyword id="21006654" type="General" weightage="100" keywordseo="indexation-benefits" source="keywords">indexation benefits</keyword> will no longer be available for real estate, gold</li><li>Effective July 23rd, LTCG will be charges at 12.5%, sans indexation benefit</li></ul> After FM <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> proposed to remove indexation benefits on <keyword id="20584761" type="General" weightage="20" keywordseo="long-term-capital-gains" source="keywords">long-term capital gains</keyword> (LTCG) on real estate, gold, and other unlisted assets, discussions were abuzz on the internet as to how this would lead to significantly higher <keyword id="20118944" type="General" weightage="20" keywordseo="taxation" source="keywords">taxation</keyword> on gains from <keyword id="20008581" type="General" weightage="20" keywordseo="property-sales" source="keywords">property sales</keyword>. Previously, LTCG on long-term capital gains was marked at 20%, but it came with indexation benefits, which eventually lowered the individual's overall <keyword id="19974193" type="General" weightage="20" keywordseo="tax-liability" source="keywords">tax liability</keyword>. Now, it has been lowered to 12.5%, but minus any indexation benefit. So, with indexation gone, how will gains from property sales be taxed going ahead? Is this applicable to all properties? What is set to change? Does it help that the <keyword id="22480102" type="General" weightage="20" keywordseo="LTCG-tax" source="keywords">LTCG tax</keyword> has been brought down from 20% to 12.5%? Lets take a deep-dive First, explain this long term short-term conundrum to me So, how much capital gains tax you're supposed to pay depends on how long you hold a particular asset before selling it. Prior to yesterday's announcement, there were 3 holding periods which determined whether an asset was held for long-term or short-term: The situation before- <ul><li>Shares, units of mutual funds would qualify for LTCG tax, if they are held for more than 12 months. If the holding period is less than 1 year, you'd have to pay short-term capital gains (STCG).</li><li>Real estate and immovable property would qualify for LTCG tax, if held for more than 24 months (2 years), along with indexation benefit. </li><li>Bonds, debentures and gold were to be considered long-term capital assets, if they were held for more than 36 months (3 years), with indexation benefit. </li></ul>But going ahead, there will only be two waiting periods which will determine whether an asset would be classified as long-term or short-term The situation now- <ul><li>For all listed securities (stocks, mutual fund units), the holding period for LTCG tax purposes would be more than 1 year (sans indexation benefits) All other assets (real estate, gold, bond, debentures) will qualify for LTCG tax, if they are held for more than 24 months (minus indexation benefits). </li></ul>What was the taxation situation earlier on long-term capital gains? What has changed? So, lets say Tara purchased a property in FY 2004-05 for Rs 20,00,000. In FY 2024-25, she decided to sell it for Rs 60,00,000. You'd think she'll have to pay a flat 20% on Rs 40,00,000, which was her total profit earned from selling her property (Rs 60,00,000-20,00,000). But this is where indexation swooped in and helped cushion the overall tax liability. Prior to July 23rd, 2024, the government considered something known as "indexed cost of acquisition" for determining an individuals' total LTCG tax liability, which was calculated using the following formula: [Cost Inflation Index (CII)value for transfer/sale year/CII for purchase year, or 2001-02 (whichever is later) X cost of acquisition]. Thankfully, you don't have to go about calculating this CII value, since the government does this for you, and notifies the same officially. What CII essentially does is that it compares the current prices of basket A(which contains a bunch of products and services) to the price of the same basket A in the year of comparison, to reflect the change in prices caused by inflation. So, for Tara, her indexed cost of acquisition would come down to Rs 64,24,778 [363(CII for 2024-25) /113(CII for 2004-05)X 20,00,000]. This would mean she incurred a capital loss of Rs 4,24,778, since her indexed cost of acquisition is more than her sales receipts. So, she does not need to pay any LTCG tax. She can set off this loss, but only against her other long term gains with a limit of Rs 2 lakh in one financial year, and can carry forward the same for a maximum of 8 years. However, this changed when the budget memorandum noted yesterday, "indexation available under the second proviso to section 48 is proposed to be removed for calculation of any long-term capital gains which is presently available for property, gold, and other unlisted assets. This will ease the computation of capital gains for the taxpayer and the tax administration". This means that indexation benefits on LTCG will be applicable starting July 23rd, 2024. To understand its impact, assume that this rule is in effect from April 1, 2024. In that case, Tara's LTCG will be a flat 12.5% of her total gains of Rs 38,75,000 (remember, Rs 1,25,000 per year on LTCG are tax-exempt). This would bring Tara's taxability to Rs 4,84,375 Long story, short, minus the indexation benefit, Tara will have to pay Rs 4,84,375 as long-term capital gains tax. However, there has been a slight increase in the basic tax exemption limit for LTCG. Previously, LTCG of up to Rs 1,00,000 in a single financial year was tax-free. But now, this threshold has been raised to Rs 1,25,000. Small wins! <div type="Article" hostid="261" msid="111956035" title="Decoding capital gains taxes: What FM Nirmala took from your pocket, what she gave you in Budget 2024" mstype="2" mssubtype="0"></div> Okay, is there something that continues to be the same for long-term capital gains? Yes, roll-over benefits continue without change. This means you can re-invest the proceeds from sale of your old property into buying a new, residential one, in order to avoid capital gains tax. But that too, is not without its share of catches: You can reinvest these funds in either 54EC bonds, which have a maximum annual investment limit of Rs 50,00,000. Or, you can avail this exemption for a maximum of 2 residential houses, provided your capital gains are limited to Rs 2 crore. Also, if you've it purchased a property, or held from before 2001, you can continue to avail indexation benefits, thanks to something called a grandfathering clause. Does indexation or lower tax rates work better? There's no general rule here. But a cursory look indicates that high capital gains would be favorably taxed under these reduced tax rates, while lower returns and holding periods would find indexation to be a better option. Says Pankaj Kumar, VP – Fundamental Research, Kotak Securities, "the Union Budget-FY25 has rationalized long-term capital gains tax on real estate transaction. It proposed to remove indexation benefits and reduce the long term capital gains tax rate from 20% to 12.5% with immediate effect (grandfathering for properties held before 2001). We find that the new capital gains tax structure for real estate favours investors, who have generated high IRRs, while investors with poor IRRs would be worse off in the new regime". "On the other hand, it is expected to have limited impact on end users who purchase homes for personal consumption. The budget has also talked about encouraging states to lower the stamp duty and consider lower duties for women buyers. Lowering of stamp duties would reduce the overall acquisition cost in high stamp duty states/markets like Gurgaon, Chennai, Mumbai and Kolkata", continued Kumar.

Budget 2024: How will long-term capital tax change your real-estate investments post-budget?

<ul><li>Google has started rolling out new <keyword id="23456218" type="General" weightage="20" keywordseo="anti-theft-features" source="keywords">anti-theft features</keyword></li><li>Google can detect if a phone is snatched from user's hand</li><li>It will automatically lock the phone in such a scenario</li></ul> Google has introduced a series of new security features designed to make Android smartphones more secure in the event of theft. These updates, currently rolling out in the US, aim to protect personal data and render stolen phones useless to thieves. The most significant of these is the <keyword id="21675990" type="General" weightage="20" keywordseo="Theft-Detection-Lock" source="keywords">Theft Detection Lock</keyword>, which uses machine learning to detect theft-related movements and automatically lock the device. Basically, if your Android phone is snatched from your hand, <a href="https://www.businessinsider.in/tech/news/youtube-gets-generative-ai-superpowers-with-new-features-will-suggest-video-titles-to-content-creators-and-more/articleshow/113476662.cms" data-type="tilCustomLink" target="_blank">this feature</a> will lock your device and protect your sensitive information from falling into the wrong hands. <h2>Google rolls out anti-theft features </h2> The Theft Detection Lock relies on artificial intelligence and the phone’s built-in sensors to identify suspicious movements, such as when a phone is snatched from the user’s hand. When triggered, the feature locks the device instantly, preventing unauthorised access to sensitive information. Whether a thief is on foot, a bike, or in a car, the phone recognises the situation and initiates the lock, ensuring the phone becomes unusable. In addition to this, the <keyword id="23441417" type="General" weightage="20" keywordseo="Offline-Device-Lock" source="keywords">Offline Device Lock</keyword> feature kicks in when a thief attempts to disconnect the phone from the internet for an extended period. This ensures that even if the device is taken offline, it remains secure, safeguarding the user’s data. These features are designed to make it increasingly difficult for thieves to gain access to stolen devices. Another important update is the <keyword id="23456217" type="General" weightage="20" keywordseo="Remote-Lock-function" source="keywords">Remote Lock function</keyword>, which allows users to lock their phones remotely via Google’s Find My Device service. This is especially helpful if the phone is inaccessible or if the thief disables the Find My Device feature. Users can even lock their phone using their phone number, maintaining control over their data despite the loss of the device. <div type="Article" hostid="261" msid="113845568" title="I was fired from Google after 13 years of service. Here's what I learnt on how to deal with layoffs" mstype="2" mssubtype="0"></div> <h2>When will the features be rolled out? </h2> The new anti-theft features have been in beta testing since August and are now being rolled out to eligible Android devices. The features are being rolled out in a phased manner. Hence, it might be a while till you can see them on your device. As per reports, the features could be available for all users by the end of this year. You can find the options under the Google Services section in your phone’s settings. It is crucial to ensure that the device is running the latest version of <keyword id="19960136" type="General" weightage="20" keywordseo="Google-Play-Services" source="keywords">Google Play Services</keyword> to take full advantage of these enhanced security measures.

Google takes steps to protect Android devices from theft, rolls out new features

The list of major companies requiring employees to return to the office

Missing some action, adrenaline rush, and thrill in your life? Are the good old, albeit mundane money investment avenues like mutual funds and fixed deposits not making the cut for you? Want to experience a heart-pounding, financial rollercoaster that will constantly keep you and your portfolio on tenterhooks? Well then, welcome to the world of initial public offers (IPOs), especially those brought to you by SMEs, or <keyword id="6375845" type="General" weightage="20" keywordseo="Small-and-Medium-Enterprises" source="Orion">small and medium enterprises</keyword>. Truth be told, <keyword id="3704207" type="General" weightage="100" keywordseo="SME-IPOs" source="Orion">SME IPOs</keyword> have been all over the bourses this year. So far, 2024 has seen 206 SMEs debuting on both BSE and NSE, out of which 146 listed in gains and 46 listed in losses. Odds seem good, right? In contrast, the year has only seen 63 IPOs from the elder brother i.e. mainboard, only 48 of which managed to post any listing gains. And getting an allotment has also been a major uncertainty, given the unusually high demand this year. <h2>So, what's an SME <keyword id="6354763" type="General" weightage="20" keywordseo="IPO" source="Orion">IPO</keyword>, you ask?</h2>Think of a mainboard company as Shah Rukh or Salman Khan—well-established, financially stable, strong legacy of profitability, and fairly well-known. On the other hand, SMEs are your Prateek Gandhi (Harshad Mehta, Scam 1992), Siddhant Chaturvedi (MC Sher, Gully Boy) or Avinash Tiwary (Majnu, Laila Majnu). While they are doing super well, they are yet to make it big like the Khans. They’re currently underdogs, lesser known, but who knows? They can be the next big thing in the future! And SME IPOs are getting a stellar reception. In 2023, 182 such IPOs had raised a substantial Rs 4,967 crore. In 2024, more than 200 companies have already raised over Rs 7,500 crore, and we have four months to go. This, with one quarter of the year still remaining. <div type="image" title="In 2024, India leads IPO activity in the Asia-Pacific region" height="900" width="1200" msid="113875643" hostid="261" caption="&amp;lt;p&amp;gt;In 2024, India leads IPO activity in the Asia-Pacific region&amp;lt;/p&amp;gt;"></div> But what does it take for a company to be classified as a small enterprise? The company has to have an annual turnover/income of up to Rs 50 crore, and for a medium enterprise to be called so, its annual income has to be up to Rs 250 crore. When such companies go public, in a bid to raise funds from investors and expand their operations, they launch an IPO, but not on the main exchange, but separately, on NSE’s Emerge and BSE’s SME platform. As of September 2024, <keyword id="4484133" type="General" weightage="20" keywordseo="NSE-Emerge" source="Orion">NSE Emerge</keyword> has 147 listed participants, while <keyword id="1885131" type="General" weightage="20" keywordseo="BSE-SME" source="Orion">BSE SME</keyword> has 155 market makers. Mounting an SME’s IPO is comparatively less stringent than their mainboard counterparts, as far as regulations are concerned since their DRHPs (draft <keyword id="12225712" type="General" weightage="20" keywordseo="Red-herring-prospectus" source="Orion">red herring prospectus</keyword>) are not filed with SEBI. So, wouldn’t a lenient treatment make them inherently riskier? Why are they so appealing, you ask? <a href="https://www.businessinsider.in/stock-market/news/a-company-with-8-employees-looking-to-raise-12-crore-ended-up-getting-applications-worth-over-4700-crore/articleshow/112824522.cms">Delhi firm with just 8 employees seeks ₹12 crore via IPO, gets ₹4,700 crore worth of investor applications!</a> Well, for one, some of them have delivered exceptional returns—we’re talking 100%, 200%. Consider this—Owais Metal and Mineral Processing, which launched its IPO in February this year, delivered a whopping listing gain of 201%. Another SME, Maxposure, whose IPO was out in January 2024, had earned its investors listing gains worth 317.40%! Apparently, higher risks also mean higher returns, and also super high investment. Most SME IPOs need a minimum investment of Rs 1,00,000 or more, as opposed to mainboard IPOs, where you can buy one lot of shares for anywhere between Rs 14,000-15,000. Even the minimum trading lot size for SME shares is about 10,000. In short, you’d have to potentially empty your pockets to invest in an SME IPO. And still, there’s no guarantee that the listing will fill your wallets. For all you know, your pockets before and after the IPO is listed might stay the same - EMPTY! There's also the question of whether or not these SMEs are able to maintain their listing day mojo, or do they just fizzle out thereafter? Data from Prime Database highlights more instances of the latter. As of August 2024, about 166 SME IPOs had made it to the exchanges. Around 72 of them, or close to 50%, could not sustain their momentum going ahead, and were trading below their listing day prices. Consider this. The post listing gains of Medicamen Organics, whose IPO came out in June 2024, earned its investors massive listing gains of over 300%, by listing at Rs 137.85, significantly higher than its price issue price, which was set between Rs 32-34. But as of October 1, 2024, the stock was trading at Rs 64.2. Talk about falls. Additionally, risks of pump-and-dump, and illiquidity, among others makes SME IPOs dangerous See, you're largely venturing into unknown, pitch-dark territories, without much light to guide you. For starters, SME IPOs face less scrutiny from market watchdog SEBI. This also means they are able to list quickly, just 3-4 months. On the other hand, mainboard IPOs can take upto a year before they are cleared for listing. Also, there is far less information and disclosures available about their financials, fundamentals and performance to investors for making an informed decision, as compared to mainboard stocks. Then there’s the issue of illiquidity. Once purchased, you might find it hard to sell off your SME stocks, since they are not traded as frequently in the market, which means lower liquidity. Trivesh D, COO, Tradejini explains that liquidity is a major concern for such stocks. “These stocks typically have a smaller free float, and are traded in lots, which can lead to volatility and sharp price swings. This means it can be challenging for investors to buy or sell shares without significantly impacting prices. Additionally, speculative trading practices, like 'pump-and-dump' schemes, can inflate stock prices, leaving retail investors vulnerable to sudden drops”. Recently, SME IPOs have gained notoriety for price manipulation via showing fictitious sales and revenue in their books of accounts, selling of promoter holdings at inflated prices, and being the facade for many infamous <keyword id="10663340" type="General" weightage="20" keywordseo="Pump-and-Dump" source="Orion">pump and dump</keyword> schemes. This is where select people create frenzy, or mass euphoria over a particular stock or company, causing its prices to soar, and then dumping them, or selling their shares at this massive price to make a killing! Infact, it's not just the promoters, but also the investment banks floating these IPOs. At present, SEBI is investigating around 6 investment banks which have allegedly charged SMEs a staggering 15% of funds raised via IPOs as fee, as opposed to the standard 1-3%. In March 2024, SEBI chairperson Madhabi Puri Buch had also highlighted witnessing signs of manipulation in the SME space. “We do see signs of manipulation in the SME segment. We are able to see certain patterns.” Buch had observed back then. Adds Kresha Gupta, Founder &amp; Director, StepTrade Share Services, “Investing in SME IPO comes with significant risks, despite their impressive returns in recent years. Limited participation from institutional investors and public in some SME IPOs also mean that those companies may lack the support and stability that comes with larger-scale investments” “Additionally, many SMEs may not have strong fundamentals to justify their valuations. High P/E ratios can be misleading, and while some IPOs have delivered impressive returns, they often come with significant volatility, continues D of Tradejini. <h2>So, should I stay away? </h2>Yes, and No. Yes, if you don't want to do your homework of researching the company thoroughly beforehand. Anand K. Rathi, Co-Founder of MIRA Money suggests asking a couple of questions before investing your hard earned money: <ul><li>What is the company's financial performance over the past 3-4 years?</li><li>What is the company's governance structure?</li><li>Is the financial success driven by the IPO, or is it a result of consistent performance?</li><li>Does the company have what it takes to scale its operations to the next level?</li><li>Are the company’s promoters trustworthy, capable and experienced?</li><li>What is the level of participation by large, institutional investors?</li></ul> But staying away completely? Not necessary. Gupta adds that retail investors, in particular, should avoid viewing SME IPOs as quick money-makers based on their short-term performance, as this can certainly lead to poor investment decisions. “To mitigate risks, investors should always focus on long-term fundamentals rather than just short-term price movements. Key indicators include the participation of institutional investors like DIIs and FIIs. This often signals confidence in the stock”, she continues. A red flag you should look out for is if a company is only offering OFS, or Offer for Sale. This can indicate early investors looking to exit, potentially signaling weaker future growth. That's why it is better to look for companies which are raising capital for expansion purposes. This is a sign of healthy business growth prospects and improving fundamentals. In conclusion, backing the underdog, or SMEs, is not a bad proposition, but not without its risks. Investing in SME IPOs is like riding a unicorn—but you don't know whether you're riding it to rags or riches! So, take your pick.

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