Sebi has notified a stricter regulatory framework for small and medium enterprise (SME) IPOs. The reforms aim to provide SMEs with a sound track record an opportunity to raise funds from the public while protecting investor interests. The move follows a rise in SME issues, which has driven significant investor participation. SME-listed entities will have to comply with related party transaction (RPT) norms applicable to the main board of the stock exchange(s), Sebi said. The Draft Red Herring Prospectus (DRHP) for SME IPOs must be made available for public comments for 21 days, it added. The minimum application size forSME IPO to two lots has been increased to avoid unnecessary speculation in SMe IPO, the regulator said. In 2024, around 240 SMEs raised over Rs 8,700 crore, double the Rs 4,686 crore raised in 2023, according to the data provided by primedatabase.com. The amount allocated for general corporate purpose (GCP) has been capped at 15 per cent of the total issue size or Rs 10 crore, whichever is lower.