Mumbai, Jan. 5 -- The DU Digital Global Ltd stock manipulation case once again draws attention to vulnerabilities in India's rapidly expanding small and medium enterprises (SME) segment, raising questions about whether investor protection mechanisms are keeping up with rising retail participation.

In its 31 December order, the Securities and Exchange Board of India (Sebi) penalized a closely knit group of 26 entities a total of Rs.1.85 crore and barred them from the securities market for varying periods for manipulating the price and volume of the DU Digital Global stock through synchronized, circular, and reversal trades.

Listed on the SME platform of National Stock Exchange of India Ltd (NSE) in August 2021 at Rs.12 a share, the stock...