BSE working to let SMEs list on bourses

With the Bombay Stock Exchange (BSE) showing signs of flexibility to let the small and medium enterprises (SMEs) list on stock exchanges on the lines of the Alternative Investment Market (AIM) of London, the SMEs in the Saurashtra-Kutch region are celebrating.

The various clusters of SMEs mainly in the manufacture of engineering goods, cotton ginning, textiles, consumer durables and others have welcomed the news.

While speaking to Business Standard on why the decision would benefit the region, Naresh Patel, President of Rajkot Engineering Association said, "Undoubtedly the decision has been welcomed by the fraternity, because there is a very strong population of 10,000 plus SMEs, of which a few are renowned brands and service world markets. If this option of entering the investment market is opened to them, we at this stage perceive that at least 500 of the 10,000 SMEs would foray into the stock market, in the first phase."

From the point of view of investments, Ketan Marwadi, Managing Director, Marwadi Shares & Finance Limited, eminent stock broking firm from region told Business Standard, "Huge investments in existing business is a core requirement for sustenance in the global markets presently, looking for future growth plans any SME will compel entrepreneurs to enter a different financial orbit altogether. This will let them explore possible fund-raising options like entering the stock market, going in for private equity placement or availing private equity from foreign firms. So if a design is envisaged to let SMEs list on the stock markets, it will receive a positive response across the Saurashtra-Kutch region, as there are SMEs operational in various business verticals who need to grow and also require huge funds to support their future growth plans."

Emphasising on the corporate performance as one key factor responsible for booming stock market and if SMEs are allowed to list on stock markets, S S Joglekar, President, P M Diesels Limited said, "Majority of Midcap companies listed on stock market and performing well are by and large outsourcing their tertiary requirements like production, designing etc from SMEs, so indirectly SMEs have always played a pivotal role in corporate performance of the nation, but with possible indications of SMEs to be allowed to list of stock exchanges, it would create altogether a different scenario not only benefiting the SMEs but equally raising the equity volumes of the stock exchanges in the country and also benefiting the small time and retail investors in larger context."

Saurashtra-Kutch region has a very strong base of SMEs in the industrial clusters mainly in Rajkot, Jamnagar, Morvi, Jetpur, Savarkundla, Porbandar, Amreli, Bhavnagar, Surendranagar, Junagadh, Kutch (Bhuj) and other places, registering an average turnover of around Rs.14,000 crore to Rs 15,000 crore on an annual basis and generating employment for 20-25 lakh people directly or indirectly across the region.