NSE to Empower Bengal MSMEs Through IPO Awareness

The National Stock Exchange (NSE) has inked a memorandum of understanding (MoU) with the Government of West Bengal to raise awareness among the state's MSMEs about fundraising opportunities through IPOs on the NSE Emerge SME platform. The MoU, formalized during the Bengal Global Business Summit, outlines collaborative efforts between NSE and the state government to conduct seminars, MSME camps, knowledge sessions, road shows, and workshops.

The initiative aims to guide enterprises in West Bengal through the fundraising process on the NSE Emerge platform, offering support and facilitating awareness sessions on the benefits of listing on the stock exchange.

Rajesh Pandey, Principal Secretary of MSME & Textiles for the Government of West Bengal, expressed the belief that listing on the capital market would empower MSMEs to secure capital for their growth, providing an opportunity to showcase their businesses to a broader investor base through the NSE Emerge platform.

Establishment Of Alternative Fund Platform

According to data from the MSME Ministry’s Dashboard, West Bengal currently has 8.21 lakh Udyam-registered MSMEs, with the highest concentration in North 24 Paraganas (99,373 MSMEs), followed by Kolkata (94,554) and South 24 Parganas (63,282).

Sriram Krishnan, Chief Business Development Officer at NSE, highlighted that the collaborative efforts between NSE and the state government include the establishment of an alternative fund platform for MSMEs in West Bengal. Krishnan urged MSMEs in the state to embrace this new avenue of financing through NSE Emerge.

In a similar move to boost SME listing, the Odisha government announced in September a one-time grant or financial assistance for companies listing on NSE or BSE, providing up to 2 per cent of the total capital raised or 20 per cent of the expenditure incurred for raising capital, with a ceiling of INR 10 lakh on successful listings.

As of now, NSE's SME Emerge platform has a diverse listing of 396 companies spanning various sectors, accumulating a total fund of over INR 7,800 crore. The combined market capitalization of these entities has surpassed INR 94,000 crore. Notably, 16 companies hailing from West Bengal contribute to this impressive roster, collectively mobilizing funds exceeding INR 224 crore on the platform.

What is SME IPO?

An SME IPO, which stands for Small and Medium Enterprise IPO, serves as a gateway for SMEs to enter the stock market. It presents a valuable opportunity for promising companies to secure investments. An SME IPO is the inaugural offering of shares to the public by a privately owned small and medium enterprise (SME) firm, resulting in its listing on either the BSE SME or NSE Emerge platform. To qualify for an SME IPO in India, companies must have a post-issue capital ranging from a minimum of INR 1 crore to a maximum of INR 25 crore.

Conclusion

Collaborative initiatives between stock exchanges and regional governments are likely to play a crucial role in promoting financial inclusivity, as seen with the NSE's partnership with the Government of West Bengal. Such initiatives will continue to propel the growth of small and medium enterprises (SMEs) through innovative funding avenues, shaping a dynamic landscape where regional businesses thrive on the global stage, driven by increased access to capital markets and heightened awareness of IPO opportunities.