Small and Medium-sized Enterprises (SMEs) play a crucial role in the growth and development of any economy. However, until a decade ago, SMEs in India faced challenges in raising funds for their businesses, lacking access to the capital market route. In 2012, the BSE and NSE introduced dedicated SME exchanges, opening up new possibilities for SMEs to raise capital and grow sustainably. Since then, both platforms have witnessed a significant increase in SME listings, and many have taken the next step by migrating to the main board exchanges. In this blog post, we will explore the rise of SMEs on main board exchanges and the benefits it offers for their growth and expansion.

The Flourishing Growth of SME Exchanges: The introduction of SME exchanges on BSE and NSE has been a game-changer for the Indian SME sector. These platforms have provided viable and sustainable options for SMEs to raise funds from the capital markets. The number of SME listings on these exchanges has been steadily increasing year over year, indicating the growing popularity and acceptance of these platforms among SMEs.

In the fiscal year 2021-22, the BSE SME platform witnessed 33 new listings, a number that almost doubled to 63 in the following fiscal year. Similarly, NSE saw 62 new SME listings in 2022-23, compared to 31 in the previous year. These numbers highlight the increasing interest of SMEs in tapping into the capital market for growth opportunities.

The Benefits of Main board Migration: While SME exchanges provide a strong platform for raising capital, many SMEs view migration to the main board as a natural progression in their growth journey. Main board exchanges offer several advantages that align with the expansion plans of these companies. Notable benefits of main board migration include:

1.     Enhanced Credibility: Listing on the main board exchanges enhances the company’s credibility and reputation, instilling confidence in investors and stakeholders.

2.     Access to Larger Capital: Main board exchanges provide access to a more extensive investor base, opening doors to larger capital inflows for expansion and strategic initiatives.

3.     Regulatory Compliance: Migrating to the main board requires adherence to higher regulatory standards, signaling a company’s commitment to transparency and corporate governance.

Real-Life Success Stories: Several SMEs have successfully migrated to main board exchanges, illustrating the success of this strategic move. Advait Infratech Limited, a prominent company in product solutions for Indian power and telecom infrastructure projects, recently migrated to the BSE main board from the SME platform. Similarly, Nandini Creations, renowned for its Jaipur Kurti brand, transitioned to the NSE main board after years of successful growth on the NSE Emerge platform.

HEC Infra Projects Ltd, an EPC contractor in electrical engineering, celebrated a milestone as the 100th company to migrate from NSE SME to the main-board. Additionally, Zodiac Energy, a solar energy company, achieved the distinction of being the first company to simultaneously migrate to the main boards of both BSE and NSE.

Out of the 445 SMEs listed on the BSE SME index, a remarkable one-third (176) have successfully made the transition to the prestigious BSE main board. Similarly, on the NSE platform, more than 130 SMEs out of a total of 333 listed on NSE Emerge have embraced migration to NSE main board.

The rise of SMEs on main board exchanges signifies a positive shift in the Indian business landscape. By offering a path for sustainable growth, SME exchanges have empowered these enterprises to raise risk-free capital and expand their businesses. Main board migration is a natural progression for successful SMEs looking to access larger capital pools and demonstrate their commitment to best practices and regulatory compliance. With inspiring success stories and a thriving entrepreneurial spirit, SMEs are embracing the main board as a gateway to new opportunities and greater achievements in the ever-evolving capital markets.

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