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Ipo | 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 collateral-based financing.

Listing on SME Platform: An “Opportunity Ticket

Companies possessing the following characteristics can avail the Listing opportunity.

Capacity to absorb future growth and competition growth Oriented

 Financial Sustainability: With the access to the good amount of capital, a business can get enough opportunity to sustain over a considerable period.

 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 group.

Benefits To The Company

 Accelerate growth engine to help the Company reach the next level

 Adding equity helps to achieve optimal capital structure

 Direct cost-free capital infusion without tax payment (cost of 35%).

 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 Ratio, etc.

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 Funding)

Encashment of value in real terms

The outlook of Bankers / FIs

LISTED 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

Other Benefits 

  • Improvement In Credit Rating
  • Enhance Visibility and Branding
  • Prestige & Employee Motivation
  • Superior Efficiency

Competitive Edge

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 peer group.

Opens up avenues to raise further capital and other private equity funds and opens up for strategic acquisitions.


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Important Message The information contained in this file is provided for informational purposes only, and should not be construed as legal advice on any matter. The content and interpretation of the law addressed herein is subject to revision. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this file to the fullest extent permitted by law. Every effort is made to avoid errors. In spite of that, errors and discrepancies may creep in. It is expressly stated that neither Findoc Investmart Private Limited nor any of the contributors of updates will be responsible for any damage to anybody on the basis of this document. Readers are, therefore, requested to cross check with the original sources e.g. Government publications, Orders, Judgments etc., before taking any action or making any decision. These services are being provided through our group companies Findoc Capital Mart Pvt Ltd and Findoc Finvest Private Limited

Attention Investors
  • 1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.
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  • 3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

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