SME IPO
Small and Medium Enterprises (SMEs) are the heartbeat of Indian economy. There are more than 6.3 Crore MSMEs, which contribute 30% of India’s GDP. BSE and NSE have launched the SME platforms since 2012, where companies can raise funds from the capital markets. After few years the company has an option to migrate from SME Platform to the Main Board. SME IPOs continue to gain momentum, with SMEs gaining better liquidity, credibility, governance, and transparency without losing majority control over the business. Public listing can help in increasing company visibility and credibility attracting potential customers and partners creating brand recognition for the company.
BASIC REQUIREMENT FOR SME IPO
- Strong and Dynamic Top Management
- Good track record of at least last three performance years.
- The company should be incorporated under the Companies Act.
- The post-issue paid-up capital should not exceed ₹25 crore
- The company should have a positive net worth in at least two out of thethree preceding financial years.
- Group of Talented People to growth and also sustain
- Long Term Plans Displaying Need of Expansion and Market Stability
BENEFITS OF SME IPO
- Value Unlocking of Organization
- Increased capital & Improved financial position
- Access to a larger pool of investors, both domestic and international.
- Listing enhances company’s visibility, credibility, and reputation
- Shares become tradable, providing liquidity to existing shareholders.
- Better valuation and Market Capitalization
- Improvement in debt equity ratio – Reduce the debt and related finance cost
- Enhanced ability to raise capital in the future
- Companies can any time raise funds through CDR, Preference share etc
- Creates employee incentive mechanisms – ESOPs to retain Talent Pool
VALUEAXIS ADVISORS CAN SECURE YOUR COMPANY’S TRUE VALUE THROUGH LISTING ON BSE/ NSE PLATFORMS:
- We help SMEs in realizing their coveted dream of listing by providing end-to-end IPO support for SME listing, execution support and hand-holding.
- Even before the process begins, we undertake a thorough readiness assessment, assess the value potential for the company, identify and mitigate gaps (if any).
- We help SMEs develop an overall IPO strategy, define the rationale and correct perimeter of the deal.
- We through our wide network of merchant bankers, help SME’s to navigate the market complexities successfully and secure the optimum valuation.
- We handhold the promoters end to end to build a powerful, integrated IPO equity story and demonstrate value creation proposition.