SME platform seeing flurry of listing action
platform dedicated to small and medium enterprises (SMEs) is currently witnessing a flood of public offerings on surging demand from rich individual domestic investors with the risk appetite for such small issuances.
So far, in 2023, 100 SME firms have raised a record ₹2,600 crore of funds from the SME board, breaking the previous record of ₹2,287 crore raised in 2018 by 141 firms. By contrast, 19 companies have raised around ₹14,500 crore on the main board.
These 100 SME IPOs saw a demand for about ₹1.44 lakh crore, with 11 IPOs subscribed between 200 and 400 times, and 13 of them between 100 and 200 times. The ₹60-crore public offering of Noida-based startup Oriana Power, a solar energy solutions provider, was subscribed 177 times earlier this month, generating a demand for ₹10,535 crore.
«The surge in demand for SME IPOs is a result of heightened liquidity, stemming from the absence of significant-scale IPOs in recent months, coupled with a secondary market that is relatively less affordable,» said Mahavir Lunawat, managing director of Pantomath Financial Services Group.
«However, investors are advised to exercise prudence in evaluating company fundamentals and associated risk factors before considering investments in SME IPOs.»
In 2022, a total of 109 companies raised ₹1,875 crore from SME platforms, while in 2021, 59 companies raised just ₹746 crore, showed data compiled by Prime Database. The ₹44.2-crore public issue of Drone Destinations was subscribed an eye-popping 191.65 times last month.
Positive Returns
Its IPO fetched bids worth Rs 8,571 crore.
