SMEs contribute to the Indian economy on a large scale. They contribute around 30% to India’s Gross Development Product (GDP) and one of the largest job-creating companies after the agriculture sector.
Most SMEs contribute to the rural development of India by creating several jobs in the towns and introducing new technology to the people over there.
SMEs got affected most due to lockdown
Due to the surge in Covid, 19 infections government has imposed lockdowns in certain states and cities which affected small and medium business on large scale. This all can affect SME’s balance sheet numbers and investors might get uncomfortable with such numbers.
Increasing debt was always a problem for SMEs and due to the imposed lockdown, we can see this debt rising even more. Though RBI announced some liquidity for SMEs and healthcare sectors. RBI has announced loans up to Rs. 25 Crores for small businesses.
A platform for SMEs to raise money through IPO
In 2012, an equity fundraising platform was made for SMEs and from then many webinars are taken to educate the promotors of SMEs. In this seminars point of focus was to teach and bring awareness among the promoters to raise funds through equity platforms.
To date, more than 556 SMEs raised funds through this platform. In total, they raise approximately Rs. 6,586 Crores and now the total valuation of listed SMEs is around Rs.40,678 Crores.
Since April 20, 50+ SMEs raised Rs. 246 Crores which is quite good.
In FY22 we were expecting 70 SMEs to get listed but due to uncertain conditions caused by the pandemic, only 35 SMEs will get listed as per the reports.