PM Modi’s, Make in India drive has got a big boost as the return has been 700 % the SME IPO index in the last three years and units listed able to equity finance their projects in the face of bank loan squeeze .
SMEs provide a major chunk of employment and contribute in a major way to export earnings.
According to BSE SME head, Ajay Thakur, bank finances getting squeezed in the wake of provision for liquidity to balance NPAs and Basel III norms looking at good quality assets for banks, SMEs stand to raise money through listing and also use it as a collateral to raise debt.
Trailing at just 120 listed SMEs since the platform got operational since March 2012, and 30 more in the process of being listed, Thakur after a seminar with the Raigad chamber of commerce and industry said, even if I were to look at 500 of the rich cluster of some 5000 industrial units in Raigad district, it would be really a good and encouraging number. And it is a win-win situation as the SMEs also stand to raise equity.
“The IPO of SMEs compulsorily get subscribed as the merchant bankers are the underwriting agent,” observed Mahavir Lunavat, group MD of Pantomath-a category I merchant bank listed with the BSE.
Raigad is a logistic hub having proximity to the commercial capital, and close to the JNPT.
Thakur has also elaborated the various benefits that arises out of listing viz.
- Provides the SMEs with equity financing opportunity to grow their business from expansion to acquisition.
- Equity Financing lowers the debt burden leading to healthier balance sheet.
- Expands investors base, which in turn helps in getting secondary equity financing, including private placement.
- Enhances company’s visibility and credibility.
Source: The Times of India
Image Courtesy: The Hindu
