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SMEs raised over Rs 900 crore through IPOs in FY22, up nearly 4X from previous year

Credit and Finance for MSMEs: The overall IPO momentum is likely to continue in the coming financial year as 54 companies, holding SEBI approval, are looking to raise a massive Rs 1.40 lakh crore.

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The largest SME IPO in FY22 was of Gujarat-based Aashka Hospitals for Rs 96 crore in September last year.

Credit and Finance for MSMEs: Initial public offerings (IPOs) from small and medium enterprises (SMEs) in the current financial year jumped from 28 companies raising Rs 244 crore to 67 SME IPOs raising Rs 932 crore in FY21, according to the data from Prime Database. The FY22 IPO amount was 3.8X higher than the previous FY. Moreover, the largest IPO in the SME category in FY22 was of Gujarat-based Aashka Hospitals for Rs 96 crore in September last year. The growth in SME IPOs was part of the overall surge in IPO fundraising in FY22 by businesses that raised an all-time high amount of Rs 1.11 lakh crore – more than 3.5X of Rs 31,268 crore raised through 30 IPOs in FY21.  

The success of the IPOs in FY22 was further buoyed by strong listing performance, said Pranav Haldea, Managing Director, Prime Database Group in a statement on Sunday. Of the 50 IPOs listed so far, 30 had provided returns of more than 10 per cent as per the closing price on the listing date. For instance, Sigachi Industries, which is into pharma excipients, nutra and food ingredients, gave a return of 270 per cent followed by Paras Defence which gave 185 per cent per cent return, and Latent View with 148 per cent return, Haldea added.   

Moreover, 32 of the 50 IPOs were trading above the issue price (closing price of March 15, 2022). The average listing gain was 33 per cent vis-a-vis 36 per cent in 2020-21 and 24 per cent in 2019-20.  

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Pertaining to SMEs, BSE SME had 234 companies listed as of March 28, 2022, while 131 had migrated to the BSE mainboard. Overall, 365 have been listed on the SME exchange so far with Rs 3,884 crore raised. On NSE Emerge, the SME exchange arm of NSE had 241 companies listed as of March 4, as per a PTI report, with a little over Rs 3,683 crore raised. 

Meanwhile, the IPO momentum is likely to continue in the coming financial year as 54 companies, holding SEBI approval, are looking to raise a massive Rs 1.40 lakh crore including the much-awaited LIC IPO. Moreover, another 43 companies planning to secure around Rs 81,000 crore are awaiting SEBI approval. However, Haldea said the IPO activity may remain muted for at least the next few weeks due to high volatility in the secondary market, mainly because of the Russia-Ukraine imbroglio. In addition, the overall liquidity, especially from foreign portfolio investors, has also been impacted due to rate hikes from global central banks.

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