SMALL IS NOT ALWAYS BEAUTIFUL

THE SME SEGMENT WAS LAUNCHED OVER A DECADE AGO TO PROVIDE SMALLER FIRMS EASY ENTRY TO THE LISTED SPACE. WHILE IT HAS BROUGHT MORE THAN 850 SMEs TO THE STOCK EXCHANGES, CERTAIN PRACTICES HAVE PUT IT UNDER THE REGULATOR'S LENS AND TIGHTER REGULATIONS ARE IN THE MAKING

- ASHISH RUKHAIYAR

FACTS ARE STUBBORN things, but statistics are pliable,” said Mark Twain, the famous writer. The old adage holds a lot of relevance even today; but sometimes startling statistics could also be undisputable facts. How so? Take for instance the world of initial public offerings (IPOs)—especially those from the small and medium enterprises (SME) arena.

Back in 2012, BSE and the National Stock Exchange (NSE)—the two national-level bourses—launched dedicated platforms to get SMEs into the listed space. And it has been a resounding success. More than 850 SMEs have listed so far on the exchanges, with many more in the pipeline. And 2023 has set a new record in terms of the total funds mobilised by way of SME IPOs, with nearly ₹3,500 crore being raised by 135 SMEs.

But while that is true, another set of startling statistics—that are also facts—has drawn the attention of many, including capital markets regulator Securities and Exchange Board of India (Sebi), stock exchanges and other market participants.

Consider this: Mumbai-based SME Kahan Packaging launched an IPO in September to raise ₹5.44 crore but the issue was subscribed more than 700 times. Similarly, Mcon Rasayan India, which hit the market in March, saw its public issue being subscribed 380 times (