Lukewarm response to listing on BSE’s SME platform

Vijay C Roy

Tribune News Service

Chandigarh, January 16

The Northern region, comprising Punjab, Haryana and Himachal Pradesh, is a hub of small and medium enterprises (SMEs), but when it comes to raising capital for growth and expansion, the promoters still rely on conventional channels rather than listing on stock exchanges. This is evident from the fact that only nine companies from these states are listed on the Bombay Stock Exchange’s SME platform compared to 281 across across the country.

As of today, Punjab has an edge over neighbouring Haryana as eight companies from the state are listed on the BSE’s SME platform, whereas none of the SMEs from Haryana is listed. Only one company from Himachal Pradesh is listed on the platform.

“We have conducted a number of seminars to increase awareness in the northern region, but the response is not up to the mark. It may be because of lack of understanding and fear of compliance among the promoters which are the primary reasons behind the promoters not getting their enterprises listed,” said BSE’s SME head Ajay Thakur.

The platform provides an opportunity to the entrepreneurs to raise equity capital for the growth and expansion of their companies. It also brings visibility and corporate governance into the company, which further enhances the credibility of the firm. Besides the promoters, it also provides opportunity to the investors to identify and invest in good companies at an early stage.

Meant for the SMEs with a paid-up capital of less than Rs 25 crore, the platform empowers them to tap into the capital markets by getting listed on the exchange.

However, there are early movers who have already listed their companies such as Ludhiana-based Superfine Knitters and Dolfin Rubbers and Amritsar-based ANG Life Sciences.

“I raised Rs 4.08 core by getting listed on the platform. In my opinion, more and more progressive SME units should go for listing. After listing the entity, we get a stimulus to grow more to keep your share value high. With the funds, the promoter can go for technology and system upgrade, which makes the unit more efficient and growth-oriented,” said Ajit Lakra, MD, Superfine Knitters Ltd.

Lakra has advised many more SMEs to come forward for SME listing so that they can unlock the value and raise funds for further expansion and modernisation of their industries and create more employment and productivity.

Joining the bandwagon, Mohali-based Jonjua Overseas Limited, an ITES company engaged in providing legal, accounting and business consultancy services, primarily in the North American and African markets, will soon be listed on the platform. The company is planning to raise Rs 1.30 crore.

“The proceeds from the issue will be utilised to meet working capital requirements and enable the company to expand its business by being eligible for seeking listing abroad. Further, the management believes that revenue of the company will increase with presence in stock market at home and abroad,” said Jonjua Overseas Limited managing director Major Harjinder Singh Jonjua (retd).

SMEs listed

Punjab 8

Himachal 1

Haryana 0

All India 281