Bangalore, December 24: As more and more small business houses realize the potentials of getting listed on the BSE SME Exchange, the Bombay Stock Exchange's platform for small and medium enterprises (SMEs), there seems to be an increased level of interest from SMEs to reap the benefits by being on the platform.
The platform currently lists 42 companies and another 10 are in the process of getting listed in a month's time, The Business Standard reports. "Listing in BSE has helped them to collect around Rs 350-400 crore and their market capitalisation is now in the range of Rs 2,500 crore or more," Ashishkumar Chauhan, BSE's managing director and CEO was quoted as saying to the publication. "We are seeing a lot more interest today. In the next one month we think we will have 10 more companies listed and they are at different stages of their IPOs. Every day literally, one or two entrepreneurs visit BSE with their merchant bankers," Chauhan said.
In its efforts to bring more SMEs on board, BSE has a dedicated team to reach out to SME clusters in addition to working with banks and chambers of commerce to educate entrepreneurs on the benefits of the platform. With most of the SMEs being skeptical about this facility, the BSE team often takes along SME heads who have listed on the SME platform on its road shows to convince their fellow entrepreneurs about the BSE platform. The Exchange has conducted at least 50 such programs since its inception in March 2012.
Talking to SupportBiz, Ajay Thakur, SME Business Head of BSE Limited, lists out he following as the major benefits of listing on SME exchange:
1. It provides the SMEs with equity financing opportunities to grow their business - from expansion to acquisition.
2. Equity Financing lowers the debt burden leading to lower financing cost and healthier balance sheet.
3. Listing expands the investors base, which in turn helps in getting secondary equity financing, including private placement.
4. It enhances company’s visibility. Media coverage provides SMEs with greater profile and credibility leading to increase in the value of its shares.
5. It will bring about greater incentive for employees as they can participate in the ownership of the company and benefit from being its shareholders.
6. Overall, the SME sector will grow better on two pillars of financial system i.e. banking and capital market.