SME IPO fundraising nearly doubles to Rs 1,281-cr in Apr-Sep

Small and medium enterprises (SMEs) raised Rs 1,281 crore through initial share-sales in April-September period of the current fiscal, registering a nearly two fold jump from the year-ago period.

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 74 companies got listed with initial public offers (IPOs) worth Rs 1,281 crore in the first six months of the ongoing fiscal, compared to 58 firms which tapped the IPO route to garner Rs 656 crore in the same period last financial year, as per the data provided by merchant bankers.

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

"With companies listed on SME platform becoming more established, investor base is also getting broadened. Moreover with increasing number of SME stocks and greater returns thereon, more and more investors are getting attracted for SME investing," financial services advisory Pantomath Group Managing Director Mahavir Lunawat said.

The companies which got listed, during the period under review, are from sectors such as manufacturing, textiles, engineering, agriculture, chemicals, food processing, media and entertainment, construction and finance and investments.

It has been more than six years since SME market opened up and the market has been evolving gradually with varying trends such as high over-subscriptions, widening shareholder base, venture capital exits through this platform and anchor investor participation.

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, over 450 companies have got listed on them raising more than Rs 5,400 crore. Some of these SMEs have even shifted to the main-board.

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