Mumbai, Oct. 14 -- The Securities and Exchange Board of India (Sebi) has proposed an overhaul of the small and medium enterprise (SME) initial public offering (IPO) framework, including replacing paid-up capital-based eligibility with market capitalisation, lowering lock-in periods for pre-IPO investors and reducing underwriting costs, while retaining safeguards for public investors.

In a consultation paper issued on Wednesday, the regulator proposed that companies with a post-issue market capitalization of up to Rs.1,000 crore should list exclusively on the SME platform, while those valued between Rs.1,000 crore and Rs.4,000 crore could choose the segment, subject to stricter financial reporting requirements, including the adoption of I...