Gujarat firms make a beeline for listing on BSE SME bourse

To source funds and improve company’s image, Gujarat-based companies are making a beeline to get listed on the BSE’s Small and Medium Enterprises (SME) platform.

The number of firms listed on SME bourse is set to cross 100 on Thursday, with five companies opted for listing, of which four are from Gujarat.

Of the nearly 120 companies that have filed the draft red herring prospectus with the BSE SME exchange in the recent times, close to 40 firms are from Gujarat. Till date, 20 of the 98 companies listed on the platform are from the state.

Most of the companies, which are either listed or planning to get listed, aim to graduate to the main board, as it is a far easier way to move to BSE. Moreover, compared to other fund-raising options, getting capital through the SME exchange is a far easier option for companies.

“Getting 100 companies on board will definitely help the confidence of not only the exchange but for SME companies, who want to be listed in future. Presently, Gujarat-based companies are interested as they understand the benefits of listing. We are expecting SMEs from other parts of the country to come forward to list on the exchange,” said Ajay Thakur, head, BSE SME exchange.

“Gujaratis understand capital market better than anyone else. Gujarat-based companies understand the benefits of listing on the SME platform of BSE and that’s why, ratio of total listing by companies from Gujarat is high on the exchange,” said Mahavir Lunawat, managing director, Pantomath Capital Advisors Pvt Ltd.

Bhavesh Kakadiya, chairman and managing director of Bhavnagar-based Jiya Eco, said, “The SME exchange provides easy way to raise funds for small companies. Other sources like banks or private equities are tough for smaller companies.”

The Initial public offering (IPO) size of Jiya Eco is Rs 4.85 crore and it will get listed on BSE SME on Thursday. It will use the fund raised through the IPO on production capacity expansion and as working capital.

Another Gujarat-based company MD Inducto Cast Limited is also going to be listed on the exchange. MD Inducto Cast is the biggest manufacturing company to list on the exchange with an IPO size of Rs 17.30 crore. It will use the fund as working capital.

Nikhil Gupta, managing director of the company, said, “It is much easier and cheaper to get listed on SME platform than the main board. Moreover, we can experience the corporate world as we will be automatically eligible to migrate to the main board.”

Recently, Ahmedabad-based Ambition Mica Private Limited listed on the exchange. It gathered Rs 4.30 crore through IPO and will use the fund as working capital.

Ramesh Patel, director of Ambition Mica, said, “After listing, people see us as an organised company, which will surely brighten our image in the business world.”