Credit and finance for MSMEs: Even as fund-raising plans through equity markets remained lacklustre as only 17 companies raised Rs 35,847 crore via mainboard initial public offerings (IPOs) till September in the current fiscal, there was a sharp contrast in the SME segment. There was substantial activity in September 2022 in the SME segment with 19 companies (the highest number since May 2018) raising funds via IPOs, the Reserve Bank of India (RBI) said in its latest monthly bulletin on Monday citing data from the market regulator Securities and Exchange Board of India (SEBI).
“Progress towards broadening the investor base, reducing the information asymmetry for investors, and adequate aftermarket liquidity in the small and medium-sized enterprises (SME) platform can act as an enabler to further boost the entrepreneurial ecosystem,” RBI said. From six SME IPOs during April, May and June each, the number increased to 11 in July before slipping to four in August and finally bouncing back to 19 in September in the current fiscal.
Importantly, SMEs listed on SME exchanges have outperformed companies listed on the main board in the current calendar year. 87 SMEs had tapped the market this year, collectively raising Rs 1,511 crore, of which 69 companies were listed on the SME exchanges and returned 84 per cent on an average, Financial Express had reported earlier this month. Sixteen companies had in fact given returns beyond 100 per cent. On the other hand, only 20 main-board IPOs hit the markets this year, collecting Rs 43,275 crore and returning 40 per cent on an average after listing, with Adani Wilmar and Veranda Learning Solutions giving returns in excess of 100 per cent.
Subscribe to Financial Express SME newsletter now: Your weekly dose of news, views, and updates from the world of micro, small, and medium enterprises
With regards to credit to micro and small industries, the RBI noted that the extension of the Emergency Credit Line Guarantee Scheme (ECGLS) helped push up credit growth to 28.2 per cent in August 2022 from 12.1 per cent a year ago, with incremental credit (year-on-year) flows to MSMEs exceeding that to large industries. The incremental credit to MSMEs during August 2022 stood at Rs 1.8 lakh crore vis-a-vis Rs 1.5 lakh crore to large industries.
The ECLGS scheme had benefitted around 1.19 crore businesses as of June 30, 2022, with collateral-free loans amounting to Rs 3.48 lakh crore sanctioned till June end, Minister of State for MSMEs Bhanu Pratap Singh Verma had informed the Lok Sabha in August this year. While the MoS hadn’t shared the data on total disbursements, the RBI in its Financial Stability Report (June 2022) had noted that Rs 2.54 lakh crore loans were disbursed till April 30, 2022.