You are working with BSE since early 1990s. How the concept of SME exchange came in existence?
The Prime Minister's Task Force in early 2010 has made a strong recommendation to formulate a dedicated stock exchange platform for Indian SMEs. Afterwards, The Securities and Exchange Board of India (SEBI) brought clarity on the regulation for the governance of this SME Platform. BSE, which has a strong background of fund raising from the capital market, came forward and incepted India’s first SME exchange platform. Now, it has been over a year of operation and we have got 22 SMEs already listed in this exchange. The potential of this platform is huge and a lot of areas are needed to be covered.
What are the key priorities ahead of BSE SME Exchange?
Awareness is a very important aspect. Indian SMEs need updated information on the existing opportunities that they can avail through SME Exchange of BSE. With this new platform, it has become easier for the SMEs to raise fund from the capital markets, as well as to attract investors too. We are trying to create awareness by reaching out to SMEs and educating the entrepreneur community.
What are your expectations from the next six months to one year?
SMEs are showing great interest in our platform. This is a new model for the country, so initial experience is time consuming. But, as I said, we already have 22 listings on SME platform and around 8 new SMEs in the pipeline waiting to be listed. In the next three to four months, we will have 30 companies listed in the BSB SME Exchange. Moving forward, we foresee 50 companies getting listed in the BSE SME Exchange in the next one year.
What steps are you taking to motivate entrepreneurs to list their companies in SME exchange?
Ultimately cost factor is the main motivator for the entrepreneurs. Earlier, compliance was a major hindrance which deterred many companies to get listed in the capital market exchange. Through BSE SME Exchange initiative, we have given relaxation on compliances.
When it comes to SMEs, outreach becomes a very important factor. How BSE SME Exchange is working on expanding its market outreach?
Outreach is crucial to reach the SMEs. We understand the criticality of this fact and thus exploring the SMEs based in the tier 2 and tier 3 cities of the country. We are open for tie-ups with the local industry associations to spread awareness.
According to your own experience, what is the key challenge in introducing any innovative idea in the financial market?
Mostly, Indian entrepreneurs are technocrats. They have certain expertise but have limited knowledge about marketing, business expansion and fund raising. The biggest challenge is, the entrepreneurs usually possess a rigid mindset towards raising capital. This must be changed. In the SME exchange platform, we strategize our efforts to change this rigid ideology and introduce newer means of raising funds and instilling growth among the Indian entrepreneurs.