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Small companies attract investors in IPO

 
Even as large size IPOs are already a hit with investor, SME IPOs are gaining traction with investors in India. Some of the SME IPOs have been oversubscribed by as much as 85 times.This indicates increasing trust shown by investors in the small companies.
Dev Information Technology Limited's IPO got oversubscribed by as much as 74.17 times on BSE SME platform, surprising the managing director of the company, Jaimin Shah as well.
 
Dev Information Technology Limited received orders worth over Rs 463 crore as against the IPO size of Rs 6.25 crore. The company will be using the funds to expand its network in India and overseas.
 
India infoline reports, “There are almost 178 companies on the BSE SME platform that are listed so far, and their market capitalisation has crossed Rs 18,000 crore already. 50 companies got listed in 2015-16 even as 77 companies got listed in 2016-17.” Bohra Industries is one such SME IPO where even the FIIs participated. This highlights the growing popularity of SME investing in India.
“Small companies need funds. Bank loans are available only after three years. However, in IPO, they get on red-handed.This trend is appreciable.”, says Raghavan Rajkumar, a leading financial consultant from Mumbai. In small exchange, the spend for minimum expenditure rate is INR 51 lakhs, unlike the main IPO. With capital being the lifeline of any company, we should encourage the small companies. Raghavan also says that  there is a lack of awareness among the small enterprises to get on to the SME IPO.