Industry for streamlining listing process for SMEs on bourses, quicker fund raising

Ameri midst India's equity market Lemerging as the 5th largest globally by market capitalisation with exponential increase in retail investor participation, Indian industry has called for stimulating growth in small and medium enterprises (SME) capital markets by reducing the time it takes for SMEs to raise funds and streamlining the listing process on stock exchanges for SMEs.

- NIVEDITA MUKHERJEE

A report by Assocham and Resurgent India has highlighted the traditional challenge for SMEs to utilise traditional capital markets for financing largely due to an ecosystem that has not been fully accommodating. It also draws attention to the considerable benefits of accessing capital markets for Indian SMEs like access to esessential capital needed for growth, enhanced corporate governance and boost to visibility and credibility among both customers and investors The report also reflects the increasing utilisation and success of IPOS as a financing mechanism, highlighting the growing confidence in the market. Initially, the number of IPOs and the capital raised showed variability, with a notable increase peaking in 2018.

Following a downturn in 2019 and 2020, influenced by market volatility, there was a significant recovery, reaching an all-time high in 2023 in terms of both the number of IPOS and the amount raised. The early data for 2024 suggests a decrease, indicating a potential normalization of market activities or the preliminary nature of the year's data.

The BSE and the NSE have established specialized platforms for SMEs, designated as BSE SME and NSE EMERGE respectively. These platforms have been specifically designed to furnish SMEs with a more accessible channel for securing capital via the public market.