Start-ups & SMEs in India
According to government statistics, the number of recognised startups in India is 40,729, up 63.4 percent from 24,927 startups recognised by DPIIT as of November 17, 2019. The overall number of registered and unregistered SMEs in India is reported to be 42.5 million. It hires approximately 40% of India's population (approx. It has a population of 106 million people and contributes 6.11 percent of GDP (manufacturing) and 24.63 percent of GDP (services) (service sector). The SME also maintained an annual growth rate of more than 10%. Read on to know about benefits of SME IPO platform.
Start-up & SME IPO
Since mainboard IPOs consider profitability to be a crucial prerequisite for companies to be listed, and startups often prioritise revenue growth and market share over profitability, Indian startups were looking to migrate to global capital markets for IPO. SEBI encourages these companies to list in India via the BSE Startup IPO. Companies that have been listed and trading on the BSE Startups platform for at least two years may seek to migrate to the main board of the BSE in accordance with SEBI guidelines.
BSE Ltd has established the BSE SME Platform in accordance with SEBI rules and regulations in order to empower SMEs. The BSE SME Platform provides an entrepreneur and investor-friendly environment for the listing of SMEs from India's unorganised sector into an organised and regulated sector. To date, 334 companies have been listed on the website, with 98 having moved to the mainboard. The platform's listed firms have a market capitalization of about 22000 crores.
The platform allows entrepreneurs to collect equity capital for company growth and development in a cost-effective way, as well as investors to find and invest in promising businesses at an early stage.
Benefits of listing
Easy access to Capital
BSE offers a channel for growth-oriented SMEs to collect capital through equity infusion.
Enhanced Visibility and Prestige
SME and startup will benefit from increased reputation and financial stability, which leads to increased demand for the company's stock and a higher valuation of the company.
- Encourages Growth
Equity finance offers opportunities for growth such as restructuring, mergers, and acquisitions, and is thereby a cost-effective and tax-efficient mode.
- Enables Liquidity for Shareholders
Equity finance provides shareholders with liquidity, as well as growth opportunities such as restructuring, mergers, and acquisitions, and is therefore a cost-effective and tax-efficient mode.
- Equity financing through Venture Capital
Creates an Exit Route, reducing the lock in period for Venture Capital Funds.
- Efficient Risk Distribution
Capital markets ensure that capital is directed to its most productive uses and that riskier activities with higher payoffs are funded.
- Employee Incentives
Employee stock options increase employee loyalty, engagement, and recruitment incentive.
The growth of SMEs and startups are essential for the economic growth of the country and through SME and startup IPO, it is an opportunity for these companies to scale up their business with the help of the funds generated through the IPO.
Our team of expert consultants works with many SMEs and startups, and helps them to launch an IPO at the BSE SME Platform.
To know more, you may write us at [email protected]