SEBI has proposed significant reforms for SME IPOs to enhance transparency and investor protection. Key changes include raising the minimum application size to ₹2 lakh, with an option to increase it to ₹4 lakh, which may exclude retail investors. A lottery system is suggested for oversubscribed IPOs to replace proportional allotment for non-institutional investors. SEBI also aims to cap the Offer-for-Sale (OFS) at 20%, enforce stricter promoter lock-in periods, and mandate monitoring agencies for issues above ₹20 crore. SME IPOs raised ₹6,000 crore in FY24.