Credit and Finance for MSMEs: In nearly a decade, 347 SME companies have got listed since the BSE set up its listings platform BSE SME for small businesses and raised approximately Rs 10 crore on average.
Credit and Finance for MSMEs: Urging small businesses in the country to seek listing route for wealth generation, Ashishkumar Chauhan, Managing Director and Chief Executive Officer of BSE on Friday said, “If you can convert your income into wealth, that would be a great idea…for me, the listing of your company allows you to convert income into wealth.” Speaking at Financial Express Online’s inaugural SME Artha event as the guest of honour, Chauhan asked entrepreneurs to not worry about the compliance processes, for these are manageable if a company secretary is hired.
SME Artha is Financial Express Online’s endeavour to help MSMEs with solutions on managing finances that were disrupted due to the pandemic.
BSE SME exchange platform was set up by the Bombay Stock Exchange (BSE) in March 2012 to provide small businesses a platform for raising equity capital for their growth and expansion, with most banks and venture capital investors remaining at bay from backing traditional SMBs. In nearly a decade, 347 SME companies have got listed since the BSE set up its listings platform BSE SME for small businesses and raised approximately Rs 10 crore on average. “Their market capitalisation has now reached Rs 37,000 crore.”
According to the latest BSE SME data, SMEs listed so far have raised Rs 3,630 crore and have a combined market cap of Rs 36,005 crore. Chauhan also touched upon how shares you hold could be either liquidated or could be used to take over other companies by using it as currency.
“To take debt, you need to have equity. SMEs that work on shoestring budgets don’t have that type of equity. Stock market is a good way to make equity,” said Chauhan, stressing on busting the myth that listing of the company would lead to take over by third parties. However, once funds are raised, entrepreneurs are answerable to those who funded, Chauhan clarified.
Elaborating on the benefits of listing SMEs, Chauhan explained how it makes business succession planning better. “If your company is listed, all your children can hold shares, and one of them can continue to work for the company, and that is how succession planning can happen.”
Another perk of being listed, as per Chauhan, is that branding of the company becomes free. This is because “every day, television, newspaper, media and social media talk about you. SMEs deserve branding and publicity, especially when it’s free, and it’s good publicity,” he said.
Moreover, benchmarking happens with listing, according to Chauhan as “everyone starts watching you, and compares you to other industry peer groups.”