Are you considering investing in shares of small and medium-sized companies (SMEs)? These shares tend to fluctuate, making them a riskier investment.
However, despite the risk, many investors are interested in these shares due to their recent profitability.
Over the last decade, SMEs have raised over Rs. 14,000 crores in funds, with Rs. 6,000 crores raised in the previous financial year alone. This notable increase in investments reflects growing confidence in SME shares.
However, it’s crucial to be cautious, as the market regulator, Sebi, has advised investors to proceed with care when investing in these companies.
There are concerns about potential market manipulation and the possibility of a bubble in SME share prices, which could lead to significant financial losses.
Due to the high impact of share price fluctuations in SMEs, investors are understandably worried about potential price drops.
While it’s uncertain whether prices will fall, the market may increase further. It’s advisable to approach these investments properly and seek expert advice.
If you’re considering a significant investment, divide it into different parts, most allocated to equity shares and the rest to SMEs.