| December 07
Are you an MSME/SME looking for expansion and need CAPITAL? Here’s the solution
GET LISTED ON SME PLATFORM which can guarantee GROWTH, INNOVATION,
AND VALUE CREATION. The following blog explains how the
SME Business can come out with IPO (Initial Public offer) to raise capital for
business. The funds are in form of equity which are non-refundable and also
does not carry any interest burden.
Challenges for SME
Adequate access to finance is crucial for SMEs to survive and
eventually grow beyond their SME status.
The reality in India: “SMEs have poor access to finance
The average SME relies mostly on its capital and/or
informal borrowings from friends and family members for start-up funds
and working capital
Consequently, Banking Institutions gravitate towards
Listing on SME Platform: An “Opportunity Ticket
Companies possessing the following characteristics can avail the Listing
Capacity to absorb future growth and competition growth
Financial Sustainability: With the access to the good amount
of capital, a business can get enough opportunity to sustain over a
Strategic Approach: Usually, the biggest hurdle in
implementation of the strategies that the companies face is the lack of funds.
This can be dealt with this listing process.
Good Name in the Industry: A listed public company undergoes
more scrutiny and disclosure of facts which makes it well-known in the peer
Benefits To The Company
Accelerate growth engine to help the Company reach the next
Adding equity helps to achieve optimal capital structure
Direct cost-free capital infusion without tax payment (cost
Interest-free funds (capital), increase susceptibility to
deal with cyclical change.
Increase in the company’s net worth; making it more
attractive to a lender(s) & enhance credit line with better rates
Opens other avenues to raise funds that are not available to
others, like FPO, Right Issue, Offer for Sale (OFS), QIP, etc.
Improvement in all critical financial ratios like Debt-Equity
Ratio, Concentration Ratio, Total Outstanding Liabilities/ Tangible Net Worth
Benefits To The Promoter
Unlocking the value - wealth is reflected not only in books
but also in real terms on the asset front of the Company
Dramatically increases the owner’s net worth; unlocking years
of hard work
Generate funds that can be used for the enrichment of the
Company and thereby increasing the net worth of the Promoters (Promoter
Encashment of value in real terms
The outlook of Bankers / FIs
COMPANIES give a level of comfort to Bankers/ FIs, due to:
Improved net-worth and better leverage
Disclosures in the Annual Report
Accessibility of the information
Growth orientation of promoters
Better corporate governance & compliance level
- Improvement In Credit
- Enhance Visibility
- Prestige &
- Superior Efficiency
A listed Company is placed in a better position in
competition in the market.
When compliance level increases on the listing, it enhances
the company''''''''''''''''s ability to manage higher growth.
Improves the credibility of the company among its bankers,
buyers, dealers, employees, credit rating, and other agencies.
The visibility and improved bottom line provides an edge over
Opens up avenues to raise further capital and other private
equity funds and opens up for strategic acquisitions.