In a significant development for the Indian small and medium enterprises (SMEs) sector, over 600 companies have utilized the SME platforms of major stock exchanges in the country, raising a cumulative amount exceeding Rs 7,600 crore until the year 2021. This information was shared by an official during an event held recently.

Table of Contents

  1. Platforms Utilized by SMEs
  2. Funds Raised and Migration to Main Boards
  3. Response to COVID-19 Challenges
  4. Rise in Debt Funding for Startups

Platforms Utilized by SMEs

According to the official, a total of 614 SMEs have accessed equity through the stock exchanges as of 2021. Out of these, 367 companies have utilized the BSE platform, while 247 entities have opted for the NSE’s platform to secure their equity funding.

Through these platforms, each exchange has facilitated raising approximately Rs 3,800 crore for the SMEs, indicating a growing trend in capital acquisition among smaller businesses.

Funds Raised and Migration to Main Boards

Noteworthy statistics reveal that 64 SMEs managed to raise about Rs 900 crore in 2021 alone, despite the challenges presented by the COVID-19 pandemic. Additionally, a substantial number of SMEs have transitioned from the SME platforms to the main boards of the stock exchanges – 113 from BSE and 102 from NSE have successfully made this migration.

Companies listed on the SME platforms have the opportunity to switch to the main exchange after fulfilling specific norms set by the respective bourses.

Response to COVID-19 Challenges

In response to the economic disruptions caused by the pandemic, the stock exchanges have taken measures to ease the terms and conditions for listing, aiming to assist SMEs in overcoming difficulties related to capital raising. The official highlighted the support provided by both private sector and government-backed SME funds, noting the existence of 19 operational funds dedicated to SME growth.

Rise in Debt Funding for Startups

A notable trend observed in the startup ecosystem is the increasing popularity of debt funding, particularly among new ventures. Reportedly, venture debt amounting to USD 538 million has been distributed until 2021, benefiting a total of 91 companies. This alternative form of funding has emerged as a viable option for startups seeking financial stability and growth opportunities.

It’s important to note that the official refrained from commenting on specific market developments unrelated to the SME sector, showcasing a focus on the positive strides made by SMEs in capital acquisition and growth.

Source: msmestory