If the initial data is anything to go by, the recently-launched segment for small and medium enterprises (SMEs) is facing several headwinds. Nearly a month after it was formally launched by BSE, only a handful of trades are being registered everyday. Also, no new company has listed itself after the exchanges launched the segment last month.
Currently, BSE is the only exchange that has a company ? BCB Finance ? listed on its SME platform. In the first 16 days of trading, the counter saw more than 10 trades only on four occasions. On March 13, when the company made its debut on BSE, 52 trades were struck with the total turnover at R71.16 lakh. The next day, only two trades were registered. The average number of trades is less than 11 (see table). On some of the days, only a couple of trades were witnessed with the turnover at a little over R2 lakh. The price of the stock has been hovering around R25 ever since it made its debut on the exchange.
According to market players, with only one listed company in the SME arena, creating awareness and getting investors in the segment has proven to be a tough task. They feel that once other exchanges also launch their SME platform and investors get to choose from 10-15 companies, the quantum of action would increase.
?The issue is about options for investors like private equity players or high networth individuals,? said a broker familiar with the developments. ?The framework is in place with the market makers given the responsibility to create liquidity. That is the reason there are at least a couple of trades everyday. But with only one listed entity, investors looking for options are currently giving it a miss,? he added on conditions of anonymity.
Meanwhile, repeated attempts to get in touch with officials at IKAB Securities ? market makers for BCB Finance ? proved futile. The Securities and Exchange Board of India (Sebi) has mandated that market-making has to be done for a period of three years for companies listed on the SME segment.
On March 13, BSE went live with its SME platform by getting BCB Finance on its segment. On the same day, the National Stock Exchange (NSE) also launched its platform by unveiling the brand name ? Emerge ? and a website for its proposed segment for smaller companies.
Incidentally, Thejo Engineering, a Chennai-based light engineering and solutions provider, has already submitted its draft red herring prospectus for getting listed on the SME platform of NSE.