New Delhi, Oct. 22 -- A Reserve Bank of India (RBI) study has highlighted growing volatility and signs of overvaluation in India's small and medium enterprise (SME) initial public offering (IPO) market, even as the segment experiences a sharp rise in activity driven by retail investors.

The study, authored by Bhagyashree Chattopadhyay and Shromona Ganguly, notes that several SME IPOs have delivered strong listing gains followed by negative returns within a short period.

This pattern, particularly pronounced in offerings that witnessed heavy retail subscription, has prompted the Securities and Exchange Board of India (SEBI) to introduce regulatory measures aimed at restoring stability in the segment.

"High demand for certain stocks, com...