SMEs SHIFT TOWARDS MAINBOARD EXCHANGES

Till a decade back, the vast SME sector of our country had limited options to raise funds for their businesses. It had no access to the capital market route. However, things changed in 2012, when the BSE and NSE introduced SME exchanges on their platforms. It saw SMEs, the backbone of the Indian economy, getting a major boost in terms of viable and sustainable options to raise funds from the capital markets

- PRIYA KAPOOR

Since their introduction, both platforms (BSE and NSE) have seen a number of SMEs getting listed and this number keeps increasing year over year. During 2022, the BSE platform witnessed the listing of 50 companies that mobilized a total capital of INR 694 crore from the market. This is nearly double of what was registered in 2021, (27 SMEs listing and mobilization of INR 382 crore). In case of NSEs, 109 companies got listed in 2022, compared to 59 in 2021. The need for a separate exchange for SMEs has been felt worldwide. At present, over 20 economies operate separate SME exchanges, including China, London and Korea.

“SME and start-up companies in the formative years find it challenging to raise resources for their passionate projects. Even when they can raise from banking and other debt channels there is inherent commitment on interest outflow without being certain on outcomes of the project. In that sense BSE SME segment provides a good opportunity to raise risk free capital which allows more scope for growth of business,” says Sameer Patil, Chief business officer, BSE Exchange.

MOVING TO THE MAINBOARD-A STEP FURTHER

Of the total 439 SMEs listed on the BSE SME index so far, more than one-third (173) companies have migrated to the BSE Main Board already. Same holds true for NSE platform, wherein it has seen migration of over 130 companies out of a total of 324. In FY 202223, as many as 34 have made a switch on the BSE platform. “The migration is aligned with our expansion and future plans of the company which are in line with the SEBI guidelines for main board listing,” says Shalin Sheth, Founder and Managing Director of Advait Infratech Limited, a leading company in product solutions for Indian power and telecom infrastructure projects, which recently announced its migration to mainboard from BSE SME. The company got listed on the BSE in 2020, almost eleven years after its inception.