It is common knowledge that SMEs form an integral part of the Indian Economy through its many operations. By employing more capital to help an SME’s scale up their profitable Operations, SMEs can contribute further to the country’s GDP.
One of the tough challenges faced by such SMEs to raise money through IPOs is that they do not fit the many qualifying criteria for listing on BSE or NSE. The SME IPO was introduced to help SMEs, who do not fit the mainboard IPO qualifications, list their shares on these Exchanges. The BSE SME and NSE SME platform has provided a business-friendly environment allowing SMEs all over India to expand and grow.
The SME IPO platforms are quickly gaining traction and turning into a robust funding source for start-ups. There have been over 300 listings on the BSE SME and over 180 listings on the NSE SME. These exchanges have been flexible enough to offer an easy and simple listing procedure for SMEs.
Listing companies on the SME platform have made SMEs accessible to various growth opportunities and company value addition. These listed SMEs can further grow and become eligible to be listed on the mainboard IPO platforms.
To make SME IPO listing easier, the Indian Government offers various schemes and programmes like Skill India, Make in India, Pradhan Mantri MUDRA Yojana and Public Procurement Policy which have tremendously helped agricultural and manufacturing enterprises. Further, the Tamil Nadu Government has announced assistance to SMEs for listing & raising money in the SME stock exchange with a maximum of Rs.30.00 lakhs subject to 50% of the total expenditure incurred on SME IPO.
Today, the many companies who have listed themselves on the BSE and NSE have been able to secure more capital and thereby expand their businesses and gain a competitive advantage over other companies. SME IPOs can create immense value additions to start-ups in India. Although the market cap and weightage of these listings seem insignificant now, they will only continue to grow as the India’s economy continues to mature.
If you would like to know more about SME IPOs, attend the panel discussion on Capital and Growth of SME on 12th April, 2022 conducted by Consulting and Beyond in association with Madras Management Association.
Key takeaways from the discussion:
- Overview of SME Market
- Factors that lead to growth
- Valuation is the Key driver for an entrepreneur’s wealth
- Recent SME IPO examples
- Preparation required for SME IPO
Let’s begin this new journey together where we shall share and impart knowledge on how an entrepreneur should think on wealth creation of a business and move towards public investment.