Public listing of small and medium enterprises on the stock exchanges will help them in attracting investments from large investors like venture capital funds and private equity players, a SME body today said.
Federation of Indian Small and Medium Enterprises (Fisme) said that public listing would give a safer option for venture capital funds and private equity companies to invest in SMEs.
"These large investors are hesitant to invest in SMEs as there is no well-defined time to get back their investments. Once SMEs get listed, venture capital funds and private equity firms will invest," FISME President VK Agarwal said.
Yesterday, both the leading equity bourses of the country, the BSE and NSE, were given a nod by capital markets regulator Sebi to launch exchanges exclusively for small-and-medium enterprises.
The idea of having dedicated stock exchanges for smaller businesses, which largely contribute to the country's economy, has been in the working for long and Sebi had laid out the guidelines for such exchanges last year.
Considering the lean nature of the companies which will be listed, Sebi has relaxed some rules for listing on such exchanges.
SMEs employs 60 million people and contributes eight per cent to the country's Gross Domestic Product.
