Weak markets fail to deter SMEs from launching IPOs

As many as six small and medium size enterprises (SMEs) have launched their initial public offers (IPOs) worth Rs 70 crore on the Bombay Stock Exchange in the past one month, undeterred by sluggish market sentiments.

The broader market Sensex plunged 232 points, or 1.2 per cent, in the month of July amid weakness in rupee.

According to an analysis, the companies that launched their initial share sale programme in the past one month are - Money Masters Leasing & Finance Ltd, Alacrity Securities Ltd, GCM Commodity & Derivatives Ltd, Silverpoint Infratech Ltd, VKJ Infradevelopers Ltd and Kushal Tradelink Ltd.

These IPOs, in the range of Rs 2 crore to Rs 28 crore, were launched on the BSE SME (small and medium enterprises) platform.

Broking firms Alacrity Securities and GCM Commodity & Derivatives raised Rs 9 crore and Rs 7 crore, respectively, through IPOs and Money Master Leasing, a non-banking financial company, garnered Rs 2 crore via this route.

Besides, infrastructure firms VKJ Infradevelopers and Silverpoint Infratech have launched issues worth about Rs 12 crore each, while paper products firm Kushal Tradelink is planning to rake in around Rs 28 crore from initial share-sale, which would be open till August 21.

However, big companies continue to find it difficult to raise capital via IPOs and the last offer by a major company was that of Just Dial in May, through which the internet firm mopped-up about Rs 900 crore.

Market experts said unlike large issues, most of the SME IPOs get fully subscribed because of their small-size. Another reason for successful subscription could be that these issues are only for informed investors.

However, they are still unsure about a revival in the primary market and waiting for the share sale programmes to materialise.

Irrespective, at least eight entities have filed draft documents with the capital market regulator Sebi in the past two months for IPOs and Follow-On Public Offers (FPOs) for raising a total estimated amount of at least Rs 1,700 crore.

with inputs from PTI