Advertisment

Stock exchange a boon for SMEs

author-image
Preeti
Updated On
New Update

Bangalore, India: Small and medium enterprises (SMEs), particularly in developing countries, such as India are the backbone of the nation's economy. The Micro Small and Medium Enterprise (MSME) sector forms the largest generator of employment in the Indian economy. It forms a major portion of the industrial activity. MSMEs contributes 8 pc of the country's GDP, 45 pc of the manufactured output and 40 pc of exports and they provide employment to about 6 crore people through 2.6 crore enterprises.

Advertisment

Stock Exchange (also called Stock Market or Share Market) is one important constituent of capital market. Stock Exchange is an organized market for the purchase and sale of industrial and financial security. It is a convenient place where trading in securities is conducted in systematic manner i.e,. as per certain rules and regulations.

In our country, we have National stock exchange (NSE) and Bombay stock exchange (BSE) the oldest in India, are the major stock markets.

The BSE was the first to start trading on a separate Small and Medium enterprises segment, launched this platform earlier this year in March.

Advertisment

Since then seven companies have got listed in this segment. Non-banking finance company BCB Finance, Max Alert Systems, web infomedia company Jupiter Infomedia, Housing finance firm SRG Housing, Cosmetic surgery and skin care services firm Monarch Health Services, financial services firm Sangam Advisors and Anshu's Clothing Ltd and RCL Foods are in the pipeline for this platform.

During its launch, BSE's then Managing Director and CEO Madhu Kannan had said the SME exchange hopes to list 10 companies in the near-term and nearly 100 companies in the longer term.

The SME platform of BSE's larger rival NSE, named Emerge, also became operational from September, with the listing of its first company, Thejo Engineering, in this segment.

Advertisment

EMERGE is a credible and efficient market place to bring about convergence of sophisticated investors and emerging corporates in the country. It offers opportunities to informed investors to invest in emerging businesses with exciting growth plans, innovative business models and commitment towards good governance and investor interest.

EMERGE will have customized processes and systems which will help prospective issuers in their journey of metamorphosing into listed public companies. This platform will provide capital raising opportunities to credible and fast growing businesses with good governance standards. It will be an ideal platform to raise funds for companies on a growth path, but not large enough to list on the main board.

The EMERGE platform of NSE will help a large number of entrepreneurs and companies in the country with growth potential to raise productive capital. The platform will create an alternate viable option for the smaller companies to raise risk capital from informed investors looking for opportunities to invest early in promising companies. Currently there are a large number of SMEs who want to grow and expand their businesses, but don't have access to a transparent way of raising capital. This will help them to grow their business and emerge in this competitive world.

©CyberMedia News

biz-tips-for-smes