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SME exchange may raise Rs 1000 cr

Small and medium enterprises (SMEs) appear to be set for a listing revolution with two separate trading platforms being created at the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) for the sector, marking a first in the history of the capital market.

business Updated: Apr 04, 2012 00:55 IST
Debobrat Ghose

Small and medium enterprises (SMEs) appear to be set for a listing revolution with two separate trading platforms being created at the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) for the sector, marking a first in the history of the capital market.

Following the first IPO by BCB Financials, a Mumbai-based non-banking finance company at BSE-SME exchange, three more SMEs — Monarch Health Services, Max Alert Systems and Jointeca — are set to hit the capital market by April end. BCB Financials raised Rs 9 crore from the market.http://www.hindustantimes.com/Images/Popup/2012/4/04_03_piz-8.jpg

“We’ve eight offer documents at draft stage and intend to list 10 SMEs in the next couple of months,” Lakshman Gugulothu, CEO, BSE-SME Exchange, told HT. The exchange aims at listing 100 SMEs in the next 18 months, with SMEs aiming to raise around R1,000 crore.

In order to enable SMEs greater access to finance, the Prime Minister’s Task Force in 2010 recommended setting up of a dedicated stock exchange.

Subsequently, the BSE-SME exchange was launched on March 13, 2012 with 10 merchant bankers (MBs) and 25 empanelled market makers (MMs).

However, the retail investors have an initial apprehension in going for IPOs of SME firms due to its local nature.

“Since we don’t know much about SMEs, I prefer to invest in banking instruments in present economic scenario,” said Pradeep Saxena, a Bhopal-based retail investor.

“Investors may not be aware of the promoters of SME firms and would be worried about getting cheated,” said chartered accountant Atul Seksaria.

“To deal with the trust deficit factor, the intermediaries should be responsible for projecting true picture of the promoters”.

“Apart from ensuring market making, the MBs should also ensure that only trusted SME managements access this segment,” said Shripal Shah, a Mumbai-based merchant banker.