SME IPO wave

Discipline & due diligence must complement subscriptions

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Long hampered by limited access to formal credit and high monitoring costs, India’s small and medium enterprises (SMEs) have traditionally depended on informal sources of finance.

Banks often view them as risky because of information gaps and an absence of collateral. Against this backdrop, fundraising through the equity market, via an initial public offering, or IPO, has emerged as a viable alternative, offering firms a chance to scale up, innovate, and professionalise. As the Reserve Bank of India’s October 2025 Bulletin notes, SME IPO listings on the BSE and National Stock Exchange (NSE) platforms surged more than 87 per cent between FY23 and FY25, while the issue size grew 527 per cent. India even recorded the highest number of IPOs in Asia last year, reflecting investor appetite and entrepreneurial confidence.