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Listed SMEs ‘emerge’ on the main board of NSE

Shares of Creative Peripherals, which migrated on August 5 surged nearly 10 per cent since then.

, ET Bureau|
Updated: Aug 22, 2019, 08.53 AM IST
Mumbai: More than a dozen small and medium companies graduated to the main exchange platform on the NSE this year alone, reflecting the positive outcome of grooming capital-starved small firms with public funding instead of relying on venture capital or private equity.

Although companies such as Creative Peripherals, Airan Ltd, Veto Switchgears, Sanco Industries may not have yielded any steep returns, some of them have performed better than the benchmarks.

“The NSE Emerge platform offers an alternative funding mechanism to small and medium enterprises where they can tap the capital markets instead of only relying on bank funding, venture capital or private equity,” Vikram Limaye, CEO, NSE told ET.

The platform — Emerge — also provides an option to these companies to migrate to the main board of the stock exchange. Since its inception, there have been 19 such companies that migrated to the NSE main exchange. Of these, 14 opted for migration in 2019.

“Several companies listed on Emerge platform have opted to migrate to the main board and the investors of these growing companies have better liquidity and greater transparency due to increased frequency of disclosures,” said Limaye.

Shares of Creative Peripherals, which migrated on August 5 surged nearly 10 per cent since then. During the period Nifty 50, the broader index lost 0.72 per cent.

Although other shares have marginally shrunk since their migration but could still be ahead compared other beaten down stocks.

“More companies are getting matured and opting to migrate on to the main board and we expect this trend to continue,” said Mahavir Lunawat, group managing director, Pantomath Advisory, a firm specialising in listing SMEs.

Post migration, corporate governance and compliance requirements get enhanced, which is better from investor perspective.

Since FY13, 200 companies were listed, raising Rs 3,136 crore collectively on the NSE platform. BSE, too, offers exchange platform on SME listings, which has gained momentum over a period of time.

A company listed on SME exchange can opt for migration subject to select parameters such as paid up capital and promoter stake.

For example, the paid up capital has to be more than Rs 10 crore and market capitalisation more than Rs 25 crore. There are also norms regarding promoter stake.

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