28 Jul 2017, 16:54 — 4 min read
In India, micro, small and medium enterprises account for 33% of India’s manufacturing output. There are as many as 36 million such enterprises in the country, employing more than 80 million people. Clearly the growth of the economy depends on SMEs getting easy access to funds.
What is SME IPO?
To meet this challenge of raising funds, two national bourses – BSE & NSE have introduced a platform for SMEs to be able to raise funds by getting listed on their exchange under the rules & regulation laid down by SEBI (Securities Exchange Board of India). These platforms i.e. BSE SME & NSE Emerge offer entrepreneurs and investors a friendly environment, which enables the listing of SMEs from the unorganized sector scattered throughout India, into a regulated and organised sector – just like the major corporations. For SME stocks to get listed and traded on exchange, a company has to come up with their Initial Public Offer (IPO) at the exchange's SME platform.
How does it work?
These bourses enable SMEs to step into the platforms and gain access to the world of finance & capital markets for their further growth & development. Then these bourses assist SMEs to raise equity capital for their growth and expansion and thus help them grow into fully-fledged major corporations & in due time, migrate them into the main board i.e. exchanges trading their shares every second during market hours.
Proof of concept
SME IPOs have gained widespread attraction. The numbers reinforce this – 187 companies raised 1,463 crore with their market cap approaching to a staggering INR 18,000 crore on BSE SME.
Reasons why SME IPO is gaining popularity:
How do you get on it?
BSE SME breaks down the process into 5 Ps – Planning, Preparation, Process, Public Offering, Post Listing.
Posted byGlobalLinker Staff
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