SMEs record over two-fold jump at Rs 2,155 crore via IPOs in 2017-18

The funds raised through initial public offerings were meant for business expansion plans, working capital requirements and other general corporate purposes

The just concluded fiscal witnessed phenomenal figures in terms of funds raised and the number of listings, we expect to witness the trend to continue in the near future

Mahavir Lunawat
Managing Director, Pantomath Group

Small and medium enterprises (SMEs) raised around Rs 2,155 crore through initial public offerings (IPOs) in 2017-18, more than two-fold jump from the previous fiscal.

Funds raised through IPOs were meant for business expansion plans, working capital requirements and other general corporate purposes, according to offer documents.

A total of 148 companies got listed with IPOs worth Rs 2,155 crore in the last fiscal as compared to 80 firms which tapped the IPO route to garner Rs 810 crore in 2016-17.

In 2015-16, as many as 46 firms made debut on SME platforms and raised Rs 303 crore.

These companies are listed on SME platforms of BSE and NSE.

“Growing SME capital markets have addressed several myths and lent a lot of confidence to growing entrepreneurs. With companies listed on SME platform becoming more established, investor base is also getting broadened. Moreover, with increasing number of SME stock and greater returns thereon, more and more investors are getting attracted for SME investing.

“The just concluded fiscal witnessed phenomenal figures in terms of funds raised and the number of listings, we expect to witness the trend to continue in the near future, Pantomath Group managing director Mahavir Lunawat said.

Geographically, Gujarat topped the list as a maximum 50 firms from the state listed on SME bourses, followed by Maharashtra (43), Madhya Pradesh (13), Delhi (10), Telangana (5) and West Bengal (5).

Further, average issue size also increased during the past fiscal to Rs 14.56 crore against Rs 10.12 crore each for the preceding financial year.

Besides, institutional investors including banks and mutual funds have showed interest in the SME’s public offers.

Notably, the just concluded fiscal also witnessed tremendous response from investors in terms of subscriptions with 9 IPOs getting subscribed more than 100 times the issue size, reflecting growing interest and faith of investors in SME capital markets.

Out of 148 companies listed in 2017-18, 64 companies made a high of upper circuit limit at 20 per cent on the first day of listing.

The companies which got listed in the past fiscal are from sectors such as manufacturing, textiles, engineering, agriculture, chemicals, food processing, media and entertainment, construction and finance and investments based out of more than 60 cities covering remotest areas of India.

BSE and NSE had launched SME platforms in March 2012, becoming the only two bourses to offer such a segment in the country. Since then, 370 companies have got listed on them raising close to Rs 4,100 crore with a market capitalisation of Rs 33,000 crore.

Some of these SMEs have even shifted to the main-board.

The platform provides an opportunity to SME entrepreneurs to raise equity capital for growth and expansion. It also provides an immense opportunity for investors to identify and invest in good SMEs at an early stage.

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