Credit and finance for MSMEs: Biscuit maker Ambo Agritec was the latest SME to join the BSE SME Platform on December 2, 2022. Ambo Agritec Limited came out with an initial public offering of 34,00,000 equity shares of Rs 10 each for cash at a price of Rs 30 per equity share, aggregating to Rs 10.20 crore. The company successfully completed its public issue on November 24, 2022, and was the 408th company to list on the SME exchange.
West Bengal-based Ambo Agritec (earlier known as Sunny Biscuits) is into manufacturing biscuits, outsourced manufacturing of edible oils, vanaspati and speciality products of Bengal. In addition to this, the company is also engaged in trading of crude linseed oil and soyabean meal. Ambo Agritec uses raw materials sourced from local suppliers for biscuits and imports raw materials for edible oils and vanaspati. Kolkata-based Finshore Management Services Limited was the lead manager of Ambo Agritec Limited listing.
So far, 157 companies have migrated to the main board of BSE from the SME platform. The 408 companies listed on the BSE SME Platform have raised Rs 4,501.95 crore from the market and have a total market capitalization of Rs 64,627.09 crore as of December 4, according to the data from the exchange. However, 34 companies have been suspended till data from the platform.
The exchange celebrated its 400th listing in October this year since its launch back in March 2012. Commerce Minister Piyush Goyal on the occasion urged MSMEs to look for “dual listing” to increase their sources of capital. Goyal said small companies have the option to list on the SME platform of the leading stock exchanges, part from the Gift City in Gandhinagar.
Importantly, the Reserve Bank of India (RBI) in a working paper in August this year had noted that even though listed SMEs have better profitability ratios, higher return on assets and asset utilisation ratios and also debt-equity ratio in comparison to the smallest 25 per cent of firms listed on mainboards, they have lower liquidity as reflected in a lower quick ratio, current ratio and cash to current liabilities.
The paper also noted that the lack of aftermarket liquidity remains a problem in SME exchanges with the turnover ratios declining significantly even within the first 60 trading days after listing, indicating paltry trading in the SME exchanges in India.