Blame it on short-seller Hindenburg Research report or its fall-out, initial public offerings (IPOs) on the mainboard have drawn a blank so far this year even while 19 SME companies have braved the turbulence to raise ₹225 crore.

Many IPOs on the main board have either been put-off or withdrawn due to the relentless selling in the secondary market. The bellwether Sensex crashed 1,704 points to 59,464 points on Friday against 61,168 points logged on January 02, 2023.

The bearish sentiment has hit the primary market, forcing leading jeweller Joyalukkas India to withdraw its ₹2,300 crore IPO last week.

In all, 40 companies raised ₹59,412 crore through main board IPOs last year against an all-time high of ₹1,18,723 crore mobilised by 63 IPOs in 2021.

In contrast, about 109 SME companies had tapped BSE SME and NSE Emerge to raise ₹1,980 crore last year with many issues oversubscribed multiple times. In 2021, 59 companies raised ₹787 crore.

Gaurav Jain, Director, Hem Securities, said that after the rout on bourses, investors are looking to invest in growing companies, with 16 IPOs on SME platform listing at a premium this year.

However, investors may have to be cautious about choosing the right set of companies to get sustainable returns and should not be carried away by present euphoria, he said.

Uday Nair, Director, FedEx Securities, said that SME IPOs have witnessed sudden interest due to value creation and spurt in returns in the last couple of months.

Future, too, look good considering the number of IPO applications filed with the exchanges and those expected to be filed, he added.

Sachin Gupta, CEO & Whole time Director, Share India Securities, said that the potential of listing on SME exchange is huge as India has abundant SMEs and listed shares provide the much-needed currency for capital investment and acquisitions.

“Given the growing interest, we should see at least 250 small companies tap the capital market next fiscal against 100-120 expected this year,” he said.

Ashok Holani, Founder, Holani Consultants, said that small companies in tier-II cities are more confident now on meeting regulatory compliance for listing and they leave lot to offer for investors.

For instance, share price of Cool Caps Industries, which listed last March, rose to ₹500 from issue price of ₹38 and its turnover rose to ₹170 crore from ₹35 crore.  

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