Is Your Business Ready: Understanding SME IPOs

INTRODUCTION

The Micro Small and Medium Enterprises (MSMEs) are often termed as the backbone of the Indian Economy as they facilitate economic development and provide vast employment opportunities across every spectrum to the people. Before 2012, Small and Medium Enterprises (SMEs) could not access the Capital Markets as the Eligibility Criterions of the Stock Exchanges were very high. These exchanges required that the minimum post issue paid up capital to be INR 10 Crore and having a minimum market cap of INR 25 crores so as to be eligible to be listed on the Stock Exchanges- National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). These criterions barred the access of capital markets to SMEs. But in the year 2008, SEBI (Securities and Exchange Board of India) recognizing the prominence and importance of these enterprises in the Indian Economy ,propagated the idea of dedicated exchanges for the Listing of Securities of SMEs, which led to the formation of SME