New Delhi, Sept. 19 -- The sharp first-day gains that once defined small and medium enterprise (SME) initial public offerings (IPOs) have cooled as theNational Stock Exchange(NSE) implements a 90% cap on retail investor participation.

This move, aimed at reducing volatility and speculation, has gradually shifted the market towards more stable and rational investing.

Between July 2023 and July 2024, SME IPOs delivered exceptionally high returns, with average listing gains climbing from 63.8% in July 2023 to 94.5% in January 2024.

However, by June 2024, these gains eased to 19.2%, reflecting the market's adjustment to the new regulatory framework. The cap, which restricts retail investors to a maximum of 90% of IPO allotments, was introd...