Learnings from Indian SME IPOs since the inception of the SME Exchange in 2012
Small and Medium Enterprises (SMEs) are pivotal in driving economic growth and innovation, yet accessing capital remains one of their most significant challenges. SME Initial Public Offerings (IPOs) have emerged as an alternative financing avenue, offering smaller enterprises a direct pathway to public markets. By listing on platforms like BSE SME and NSE Emerge, these businesses can raise growth capital, enhance their market visibility, and lay the foundation for long-term scalability.
By drawing insights from over a decade of SME IPO activity, this report aims to equip founders, investors, and stakeholders with a deeper understanding of this alternative financing mechanism. This report explores the evolution of SME IPOs in India, focusing on listings till September 2024. We delve into critical questions about SME IPOs, including: What scale have companies achieved when going public? How much capital did they raise? How do valuations correlate with company size? To what extent does pre-IPO growth influence valuations upon listing?
- Of the ₹ 200 Bn SME IPO issued, >90% has been through fresh offer/primary capital.
- The median offer size has grown 3x from ~ ₹80 Mn a decade back to ~₹ 250Mn now.
- Over the last decade, the median IPO Market Cap has jumped 4.5x to ~₹ 1000Mn, whereas median revenue at IPO has grown 3x to ~₹ 750Mn.
- SME IPO investors value pre-IPO EBITDA growth and revenue growth more than absolute EBITDA and Revenue
You can find the detailed report here.
https://docsend.com/v/mqxrp/13yearsofsmeipo
Authors
Dhagash Shah
Dhagash comes with 5 years of Investing experience monitoring Indian as well as Global markets across varied sectors not limited to Retail, Specialty Chemicals, Auto. Prior to his career in Investments, Dhagash passed from IMI…- Current Section
- Associate, Growth Investment
Vikram Gawande
Vikram takes care of growth investments at Blume. He has 16+ years of experience across Technology, Consumer Internet and Venture Investments.He has spent more than a decade in the startup world, both as an entrepreneur and an…- Current Section
- Director, Growth Investment
Harshit Luthra
- Current Section