The spate of initial public offerings on the SME exchanges is set to gather more pace over the next few weeks, with 30-35 companies in this segment planning to hit the market to raise ₹1,200-1,500 crore before the financial year ends.

Companies that have received regulatory approval, have to tap the market before the March-end deadline, or they will have to submit their financial year-end balance sheets.

In all, 12 companies have raised Rs 1,133 crore so far this year at the rate of about two IPOs per week.

Ashok Holani, Director, Holani Consultants, said the coming days would be the busiest for the SME IPO market, as companies rush to beat the March-end deadline.

The markets can easily absorb the kind of issuances in the SME market given that about Rs 18,000 crore is invested every month in the equity markets through Systematic Investment Plans of mutual funds alone, he added.

Rudra Gas Enterprise, which entered the primary market to raise ₹14.16 crore this month, has attracted subscription of ₹350 crore. The shares, which were issued at ₹63 per share, listed at ₹126, and are now trading at ₹168. Similarly, Shree Marutinandan Tubes, which is raising ₹14 crore, saw subscriptionworth ₹640 crore.

Madhusudan Saha, an independent market analyst, said investors in SMEs are only looking at listing gains and are not worried about the fundamentals of the companies.

The primary SME market is getting riskier and only those investors with a high risk appetite should venture into this space, as one wrong bet could wipe out the entire savings of investors, he added.

Blast from the past

The recent Rs 56-crore IPO of Atmastco, a turnkey/ EPC contractor in the ferrous and non-ferrous sectors, received subscription for Rs 940 crore, with HNI subscription for Rs 399 crore, and retail investors pumped in Rs 487 crore.

In fact, last year’s frenzy continued unabated on the back of a bumper listing.

The 164 IPOs that were completed last year to raise ₹4,425 crore cumulatively, received bids worth ₹2.8 lakh crore. Interestingly, the overall market capitalisation of listed SMEs crossed ₹1 lakh crore recently.

Last year’s first IPO of Chaman Metallics to raise ₹24 crore, got bids worth about ₹4,800 crore, while Accent Microcell, which planned to raise ₹78 crore through its IPO, ended up getting bids for nearly ₹20,000 crore. The Rs 9-crore IPO of Srivari Spices garnered interest worth ₹3,000 crore.