WILL MY IPO GET FULLY SUBSCRIBED?

BY ROBIN GHOSH

( FORMER CHIEF ECONOMIST, BENGAL CHAMBER OF COMMERCE AND INDUSTRY)

KOLKATA, 23 MARCH 2023:

The impact of Hindenburg Report on initial public offering (IPO) has been negative. Sensex is downward.The sentiment is bearish. Primary market is dull.
No wonder Joyalukkas India, a leading jewellery company decided to withdraw its Rs. 2300 crore IPO.
Though main board IPOs have plummeted, 40 against 63 on a year to year basis – the performance of SME companies has been quite positive.
A few friends managing SME companies and planning IPO on SME platform keep asking me, – is it the right time to venture for a public issue.
Look at some hard data and make an intelligent guess. And decide the course of action.
Hard data speaks:
1. In 2021, in BSE, SME and NSE Emerge – 59 SME companies raised Rs. 787 crores.
2 . In contrast, in 2022, 109 SME companies raised Rs.1980 crores with many issues oversubscribed.
3 . Investors are taking extra interest in growing companies on the SME platform.
4 . SME IPOs are getting extra attention due to inventive value creation and positive assurance of return by the promoters. 5 .Considering the IPO application filed in the exchange, the future looks very optimistic, very positive.
Experts like Sachin Gupta, CEO of Share India Securities in a recent interview commented ” the potential of listing on SME exchange is huge as India has abundant SMEs and – listed shares provide the much needed currency for capital investments and acquisitions.”
He further said, “Given the growing interest, we should see at least 250 small companies tap the capital market next fiscal against 100 to 120 expected this year”.
Postscript: Companies operating in Tier II cities have now become compliance ready and are now prepared for listing. Offers are equally attractive and returns are assured. A classic example: the share price of Cool Caps Industries which last March rose to Rs. 500 from issue price of Rs. 38, and its turnover rose from Rs.170 crore from Rs. 35 crores.
You must agree small is beautiful.