Strong pipeline for small business IPOs; BSE SME to see over 60 listing in one year

More than 60 small and medium enterprises (SMEs) are expected to tap the market in one year to raise equity funds for supporting their business requirements, a BSE top official said on Wednesday.

These companies will get listed on the exchange's SME platform, Ajay Thakur, head of BSE SME and Startup told PTI.

Last year, only 16 SMEs had tapped the initial public offering (IPO) route and raised Rs 100 crore.

To encourage the equity culture among SMEs, Thakur said that the exchange is taking proactive measures to organise webinars, collaborate with state governments and other professional associations.

During the pandemic, the exchange has organised around 150 webinars to create awareness among SMEs about the advantage of equity funding and listing, he said.

According to Thakur, lack of awareness about listing has led to a lot of pre-conceived notions that listing involves increased compliance levels and increased costs.

He opined that listing will help SMEs to increase their visibility as well as brand building; improve their credit rating, provide easy finances and growth opportunities. ''BSE SME became the first SME platform where 400 prospectuses have been filed by SMEs. Of these, 337 have already listed and the remaining 63 will be listed in one-year time because of the ongoing pandemic,'' Thakur said.

Last year, too, because of the several steps taken by us, we saw one company got listed every month on the platform, he added.

Funds raised through the issue will be used for business expansion plans, capital expenditures or working capital requirements and other general corporate purposes. These companies belong to a wide range of sectors, like IT, automotive components, pharma, infrastructure and hospitality.

Over the years, BSE SME platform has emerged as the most cost-effective platform for small and medium enterprises to garner funds and create visibility, Thakur said.

BSE had launched SME platform in March 2012 to provide opportunity to such firms to raise capital for growth and expansion. Since then a total of 337 companies got listed on its SME segment and raised Rs 3,500 crore. These companies have a collective market capitalisation of over Rs 26,300 crore. Of these 337 firms, 99 have migrated to the main board platform.

Besides, around 10-12 companies are listed on BSE startups platform, which was launched in December 2018, to facilitate funding for the deserving startups by enabling them to raise capital from the market.