SME IPO plat­forms

Vikram Li­maye, MD & CEO at NSE, and Ajay Ku­mar Thakur, Head, SME at BSE, see bright out­look for SME IPO plat­forms on the two ex­changes:

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SME plat­forms on the Bom­bay Stock Ex­change and Na­tional Stock Ex­change are now ma­jor source of gen­er­at­ing in­ter­est from in­vestors with a record num­ber of firms hav­ing raised sig­nif­i­cant funds through IPOs in 2017-18. The BSE SME plat­form rep­re­sents com­pa­nies from 15 states and 20 ma­jor sec­tors. Ajay Ku­mar Thakur, head, SME at BSE, says 39 IPOs have been floated on the BSE SME plat­form in 2017-18 so far. In all, 216 SME com­pa­nies have been listed on this plat­form till 20 De­cem­ber 2017 since in­cep­tion in 2012.

The NSE SME plat­form en­sures the growth of po­ten­tial com­pa­nies in the SME seg­ment. The plat­form, called EMERGE, is con­sid­ered as a cred­i­ble and ef­fi­cient mar­ket place to bring about con­ver­gence of so­phis­ti­cated in­vestors and emerg­ing cor­po­rates in the coun­try. Vikram Li­maye, MD & CEO at NSE, says 61 com­pa­nies have been listed dur­ing the pe­riod April 17 till 20 De­cem­ber 2017 on EMERGE.

On BSE’s SME plat­form, `378 crore was raised in 2017 alone through IPOs, while EMERGE could raise `975 crore. It has an ag­gre­gate mar­ket cap­i­tal­iza­tion of over `7600 crore.


BSE SME plat­form was launched on 13 March 2012 and BCB Fi­nance was the first com­pany to be listed on that day. Says Thakur: “The plat­form’s mar­ket cap crossed $1 bil­lion mark on 4 April 2014. Tri­dent Tex­o­fab has got listed on this plat­form as 200th com­pany on 5 Oc­to­ber 2017.”

The first-ever SME IPO In­dex was launched on BSE plat­form on 14 De­cem­ber 2012. Thakur says the max­i­mum weight any com­pany can com­mand is capped at around 10-20%.” In 2012 it­self, in­sti­tu­tional par­tic­i­pa­tion in IPOs on BSE’s plat­form be­gan by SIDBI Ven­tures and aware­ness started be­ing cre­ated in tier 2 & 3 cities. The ex­change has also tied up with state gov­ern­ments for ex­tend­ing in­cen­tives to SME listed com­pa­nies.

EMERGE was launched on NSE on 12 March 2012. The first com­pany was listed on 18 Septem­ber 2012. Says Li­maye: “Some 50 com­pa­nies were listed on the plat­form in April 2017. The 100th com­pany was listed in Novem­ber 2017.” NSE, in as­so­ci­a­tion with in­de­pen­dent agen­cies, has ini­ti­ated busi­ness and fi­nan­cial due dili­gence, in­de­pen­dent eq­uity re­search etc. for cer­tain SME com­pa­nies. Li­maye says this ini­tia­tive is a part of NSE’s con­tin­u­ous ef­forts to adopt best prac­tices glob­ally in the eq­uity re­search space, as it adds a valu­able di­men­sion to em­pow­er­ing in­di­vid­ual in­vestors to make bet­ter-in­formed in­vest­ment de­ci­sions. It is spon­sored by NSE’s In­vestor Protection Fund Trust.


Gui­ness Cor­po­rate Ad­vi­sors, Gre­tex Cor­po­rate Ser­vices, Nav­i­gant Cor­po­rate Ad­vi­sors, Pan­tomath Cap­i­tal Ad­vi­sors and Arya­man Fi­nan­cial Ser­vices are some of the mer­chant bankers as­so­ci­ated with the BSE SME plat­form for cap­i­tal rais­ing in 2017-18 so far. In the case of EMERGE, HEM Se­cu­ri­ties, Pan­tomath Cap­i­tal Ad­vi­sors, Sarthi Cap­i­tal Ad­vi­sors, Swastika In­vest­mart and Sys­tem­atix Cor­po­rate Ser­vices are the mer­chant bankers.


BSE is lever­ag­ing the ex­ist­ing trad­ing where the SME com­pa­nies are also be­ing traded un­der ‘M’ and ‘MT’ groups. Says Thakur: “There is a con­cept of lot size where the lots of the com­pa­nies have been de­cided on the ba­sis of price band, with the value be­tween `1 lakh to `1.2 lakh.”

For EMERGE, SME se­cu­ri­ties are dis­tinctly iden­ti­fied on the ex­change’s NEAT trad­ing sys­tem. Al­ter­nate op­tions are avail­able for trad­ing of the se­cu­ri­ties of listed com­pa­nies. The SME se­cu­ri­ties can trade ei­ther in the nor­mal (con­tin­u­ous) mar­ket or have daily liq­uid­ity win­dow through a call auc­tion session. The trad­ing sys­tem has hy­brid fea­tures which al­low quotes by mar­ket mak­ers in an or­der driven sys­tem. Li­maye men­tions that some of the unique fea­tures of EMERGE in­clude cred­i­ble ad­mis­sion process, higher qual­ity in­vestor in­for­ma­tion, ac­cess to cap­i­tal and fu­ture fi­nanc­ing op­por­tu­ni­ties to the cor­po­rates, liq­uid­ity for share­hold­ers, fa­cil­i­ta­tion of ac­qui­si­tions, vis­i­bil­ity across the re­gions and mi­gra­tion to main board.


Vikram says the SME IPO pipe­line on EMERGE is ro­bust and many com­pa­nies have ex­pressed their in­ter­est. The re­sponse from the mer­chant bankers and in­vestors is also very en­cour­ag­ing. Thakur es­ti­mates some 25 com­pa­nies would get listed in the Q4, 2017-18 on the BSE plat­form. Ma­ha­rash­tra chief min­is­ter Deven­dra Fad­navis had re­cently ex­pressed will­ing­ness of the state gov­ern­ment to cre­ate a joint work­ing group with BSE to pro­mote SMEs list­ing as SMEs in the coun­try. The sec­tor is ex­pected to pro­vide huge em­ploy­ment op­por­tu­ni­ties after agri­cul­ture.

Vikram Li­maye

Ajay Ku­mar Thakur

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