SME IPOs at BSE and NSE - Are they worth considering?

Published on Tuesday, February 28, 2017 by Dilip Davda | Modified on Monday, November 4, 2019

Since 2012, SME platform turned active, we have been seeing flow of SME IPOs for both the bourses with BSE taking the lead as it crossed above 200 marks while NSE has yet to cross the 50 mark. Off late we have seen few IPOs making astounding success with new oversubscription records that has attracted the attention of choosy investors. Recent IPOs of Krishna Phos and Global Education raised eyebrows of brokers, merchant bankers and investors alike.

But the major cry for the SME platform has remained about its minimum lot while applying as well as for trading post listings. And when it comes to this, the look at the following table will make the picture clearer as to why this segment still remains ignored and not promoted to a desired level. For this, we are not going too far off but taking a view of last fifteen to gauge the facts and figures.

From the above table we can notice that only few IPOs got above 1K applications rest all were in few hundred. The IPOs that got above 1K applications were Commercial Syn, Madhya Bharat Agro, Valiant Org, Aurangabad Distilleries, DRA Consultants, Agro Phos, Libas Designs, Maheshwari Logi, Super Fine and Madhav Copper. In particular, last few IPOs have been attracting investors to cross respectable number of applications.

For this matter, investors associations, merchant bankers and even promoters have been urging the watchdog bodies and exchanges to reduce the entry level so that even small investors too can participate and the real motto of wide spread equity holders can be met easily.

Hope from the above eye opener study the concerned authorities make a note of this and does the needful.

About Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).

About Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

Email: dilip_davda@rediffmail.com