India, Oct. 16 -- The Securities and Exchange Board of India (SEBI) has proposed sweeping changes to the rules governing initial public offerings (IPOs) of small and medium enterprises (SMEs).

In a consultation paper floated on October 14, the markets regulator has proposed changes to SME IPO norms, including regulations pertaining to valuation thresholds, profitability and shareholder exits. The regulator has invited public feedback on the paper till November 4.

Citing its rationale, the regulator said that the paper has been formulated by its working group due to rapid increase in the funds raised through SME IPOs and the number of investors participating in such issues.

Since launch in 2012, about 1,500 companies have opted to list ...