Core4 Engineers reserves 12.21% of issue for market maker

Core4 Engineers has reserved up to 7,20,000 equity shares, or 12.21% of its proposed 58,94,400-share small and medium enterprise, or SME, issue, for Mansi Share and Stock Broking Private Limited. Mansi will be the sole market maker at listing and says a Securities and Exchange Board of India, or SEBI, restriction on proprietary trading imposed on August 19, 2026 was revoked the following day.

Why is Core4 reserving 12.21% of its issue for a market maker?

Core4 is reserving 7,20,000 shares for Mansi, compared with the minimum market-maker reservation of at least 5% under Regulation 261 of the SEBI Issue of Capital and Disclosure Requirements, or ICDR, Regulations. The 7,20,000-share Market Maker Reservation Portion represents 12.21% of the issue of up to 58,94,400 equity shares, according to the prospectus.

The reservation allocates 12.21% of the proposed issue to the designated market maker rather than the public portion. Core4’s issued, subscribed and paid-up share capital would rise from 1,47,88,845 equity shares before the issue to up to 2,06,83,245 shares after it, assuming full subscription of all 58,94,400 new shares.

The supplied market-making disclosure does not state an issue price, so it does not disclose the rupee value of the 7,20,000-share reservation. Core4 has not given a reason for selecting 12.21%, although that percentage is above the at-least-5% requirement set out under Regulation 261.

What must Mansi do after Core4 lists on BSE SME?

Mansi must provide eligible two-way quotes for at least 75% of market time in every normal-market trading session after Core4 lists on BSE SME. A two-way quote is a simultaneous buy and sell quotation, and Mansi must guarantee execution at the quoted price and quantity; BSE will monitor the obligation.

Core4, book-running lead manager Socradamus Capital Private Limited and Mansi entered into their market-making agreement on September 30, 2026. The agreement provides for compulsory market making for at least three years from listing, unless an amendment to the ICDR Regulations changes the applicable period.

Mansi’s minimum quote depth is Rs 1 lakh. Investors holding securities worth less than Rs 1 lakh may sell to the market maker if they sell their entire holding in one lot and submit the required declaration through their selling broker. The prospectus leaves the issue price and minimum lot size blank, so it does not state the number of shares that would equal the Rs 1 lakh quote-depth requirement.

Core4 shares will enter a 60-minute pre-opening call auction from 9:00 a.m. to 10:00 a.m. on their first trading day, including 45 minutes for orders, 10 minutes for matching and five minutes as a transition buffer. The shares will also remain in the trade-for-trade segment for 10 days from listing, while applicable first-day price bands are 5% of either the equilibrium price or, if none is discovered, the issue price.

What does the August 2026 proprietary-trading restriction mean?

Mansi has confirmed that the SEBI interim order dated August 19, 2026 restricted only its proprietary trading, and that the restriction was revoked the next day. Mansi further confirmed that trading resumed normally and that it remains eligible to act as market maker, subject to applicable regulatory requirements and exchange norms.

The prospectus records Mansi’s confirmation but does not describe the allegations, reasons or terms underlying the interim order. It also does not state any penalty or identify an order number beyond the August 19, 2026 interim-order date, limiting what can be concluded about the event from the supplied disclosure.

The distinction is operationally relevant because Core4’s post-listing arrangement is governed by BSE SME requirements and Regulation 261, not simply by Mansi’s proprietary trading. Mansi must comply with BSE byelaws, rules, operational parameters and SEBI requirements throughout the minimum three-year market-making period.

How dependent is Core4 on one market maker for liquidity?

Core4 is initially dependent on Mansi because Mansi is the only market maker named for the company’s shares. BSE SME permits no more than five market makers for a company at any time, while Core4 and Socradamus may appoint replacement or additional market makers within that limit.

After the first three months, Mansi may be exempt from issuing quotes if its holding reaches 20% of the issue size, excluding shares allotted above the stated market-maker allocation for that threshold. It must resume two-way quotes once its holding falls to 19%; the disclosure specifies no lower inventory threshold, though BSE may intimate SEBI after verification if Mansi exhausts its inventory through market making.

Mansi must confirm sufficient net worth under BSE Circular 20190718-28 dated July 18, 2019 to meet its obligations. BSE monitors market-making duties in real time and can impose monetary penalties, suspension from market-making activity or suspension of trading membership when a market maker fails to provide two-way quotes for at least 75% of the required time.

Mansi may terminate the arrangement with one month’s notice or on mutually acceptable terms. If the agreement ends before the compulsory period, Socradamus must arrange one or more replacements during the notice period and before Mansi is released; temporary or full withdrawal can also be allowed for circumstances such as system problems, with BSE approval required for controllable reasons.

Conclusion

Core4 has assigned 12.21% of its proposed 58,94,400-share issue to its sole designated market maker, making Mansi’s inventory and compliance central to the disclosed post-listing liquidity mechanism. The disclosed August 19, 2026 proprietary-trading restriction was, according to Mansi, revoked the next day, but the prospectus does not set out the underlying order’s facts or terms.

The next disclosed operational tests are whether Mansi issues eligible two-way quotes for at least 75% of market time, maintains the Rs 1 lakh minimum depth and retains inventory for market making. If Mansi gives one month’s termination notice or is permitted to withdraw, the September 30, 2026 agreement requires Socradamus to arrange a replacement before Mansi’s release.