Distress sale of property is par for the course. Sale of businesses, too, routinely happens. But in these pandemic times, the sheer volume of small enterprises wanting to sell out is shocking. At least 1,200 owners have listed their business for sale on an online deal marketplace unable to take financial stress from the lockdown.

According to data shared by online investment banking platform SMergers, the biggest impact has been on small tour operators, gyms, restaurants/bars, event management firms, salons, playschools and cloud kitchens that were primarily catering to the office-going set.

Vishal Devanath, founder of SMergers, said, “While on average small businesses had reported a 30 per cent dip in revenue for FY21 compared to FY20, main street businesses like restaurants, salons, supermarkets, entertainment centres and even businesses that were primarily catering to ‘office crowds’ are much worse affected with 90-95 per cent drop in revenues.”

He says that the liquidity crunch and the low visibility into the future are driving them to either put themselves up for sale or seek financial backing to restart operations. Many want to just shut shop, rather than wait.

SMergers has seen a sharp uptick in registrations, indicating the need for external funding support or exit amongst small businesses. In 2018, over 3.37 lakh companies had registered on its platform, whereas in 2019 it was over 3.86 lakh outfits seeking assistance.

However, the number of companies registered on its platforms has since doubled to 6.10 lakh. Of this, 32,000 companies had been listed for sale in 2019, 36,000 in 2020 and 11,000 in the first four months of 2021. More than 50 per cent of the stressed businesses listed on its website are from the travel industry. A recent survey by Dun & Bradstreet, a company that provides business analytics, showed that more than 82 per cent of firms have suffered on account of Covid-19 and 70 per cent expect it will take almost a year for demand to recover to pre-pandemic levels. About 60 per cent of the companies surveyed said they would require more support measures, including government initiatives, to withstand the adverse impact.

Arun Singh, global chief economist, Dun & Bradstreet, said, “During our recent survey, small business owners cited three most important support measures they needed to revive their businesses post the pandemic — better credit facility (59 per cent), better marketing support (48 per cent) and adoption of technology (35 per cent).”