The total m-cap of companies listed on BSE SME platform crossed the Rs 75,000-crore mark on Thursday. With more than 450 companies listed on the platform, the average market cap of the companies works out to around Rs 165 crore.
SME firms on BSE have mopped up over Rs 5,000 crore since the platform was started in 2012. The 400th company was listed in October last year. Maharashtra and Gujarat have accounted for the most number of listings.
Overall, SME firms mopped up Rs 2,232 crore by way of 125 offerings in FY23, more than thrice the mainboard issuances that hit the market. The collection was 128% higher than the previous year and higher than the cumulative Rs 1,722 crore garnered in the previous three years.
According to experts, the performance of some of the SME IPOs in the last two years has led retail and HNI investors to join the SME bandwagon. One in five SME IPOs got oversubscribed by more than 100x and 15 IPOs got subscribed in excess of 200x in 2022-23, according to data from Hem Securities. Eighty two percent of the companies listed on the SME platforms gave positive returns on listing day compared with 65% that did so on the main board.
Despite the possibility of high returns, SMEs are high risk bets. Analysing these firms could be tough because they are not tracked by analysts and there is limited data in the public domain. Investors are left to themselves when it comes to gauging the credibility of promoters.