The Bombay Stock Exchange is leveraging technology to quickly identify discrepancies in draft prospectuses as small and medium enterprises (SME) make a beeline to raise equity capital and list on the SME exchange.

BSE managing director and CEO Sundararaman Ramamurthy on Thursday said that 571 companies have listed on the BSE SME platform, raising ₹9,200 crore. Of these, 229 companies were listed last year.

But, there were rising concerns over the quality of the public offers, particularly relating to the authenticity of the accounts, high valuation and non-existent orders, as well as hidden related party transactions.

“On a pilot basis, we are using artificial intelligence and large language models, which will read the prospectus and, in 25 to 40 minutes, it will give an indicative list of areas that we should check. Once it becomes better, we will be able to fully use it,” Ramamurthy said at an event organised by Calcutta Chamber of Commerce on Thursday.

Both Sebi and the stock exchanges have clearly stipulated how many chapters should be there in a DRHP and what should be covered under each chapter. With the use of technology, discrepancies can be automatically pointed out, and companies asked to refile.

Bengal lagging

Ramamurthy rued that despite a large number of small and medium enterprises in Bengal, there have been few listings on the BSE SME exchange.

“In Bengal, there are about 90 lakh SMEs, providing 1.5 crore jobs. Only 40 are listed on the BSE SME platform. These 40 companies have raised ₹850 crore of capital, ranging from ₹1.5 crore to ₹150 crore. There is a big potential,” he said.