SME IPO : Why should Founders look at this?

I have been through the journey of SME IPO in 2016 as a 22nd company and 1st from South India also the FIRST EVER HR Company Listed (exchanges) on National Stock Exchange EMERGE platform in India.

The NSE Emerge platform has been instrumental in supporting SMEs to raise capital and gain visibility in the Indian stock market. As of December 2023, the platform had listed 397 companies with a combined market capitalization surpassing ?1,00,000 crore. These companies have collectively raised over ?7,800 crore since the platform's inception in 2012. Notably, 138 companies have successfully migrated from the SME platform to the mainboard, highlighting the growth trajectory for businesses leveraging NSE Emerge to scale their businesses.

While there is a huge optimism on the NSE EMERGE or BSE SME Listing, the fundamental question is to be answered by the Founders of the companies.

I am trying to place few objectives of Founders (not what's mentioned in the DHRP or Listing advantages etc.,)

Global Branding & Visibility :

If your objective is to build a brand that's respected and has a greater visibility for your business, Yes this could be a great addition. By the sheer volume of web data that it produces is just unimaginable, your brand (ticker) appears on millions of the sites overnight. This is not possible if you have to spend your money to create that kind of reach. World over the analysts be looking at your brand. Not just them but the customers can see you from anywhere.

I would have immensely benefited at least 3 times than what money I would have raised on the platform. That's the power of brand you become. Of course, there are only handful of companies on the Listing in India out of millions of companies that exist.

Professional Company not Family owned :

This is very important, when you have public into your share holding you are no longer can run as a family owned business. You are responsible for public at large. This brings two factors It is run by you and your professional team (your family members may be part of the leadership team) but tomorrow it would help you to step away and let the company run by the professionals. This also helps in companies where the family members (son/daughter/relatives) are not going to be part of this business journey, it makes sense to make it more professional run and with public responsibility. This organisation eventually has to run without you being on the helm of it. You may have a stake and which creates wealth for you and your family.

Credibility & Confidence to Customers

If you want to build the credibility for your business and team, this is one of the best way. Having a Brand is one angle but being a credible organisation in the eyes of the customer who is going to believe you and your lead vs sales percentage of closures be more. As the customer do not need to do a reference check on the business, its available on the public domain and gives immense confidence to the Customers.

In my case the closure ration from sales leads moved from 25% to 80%

There are many more reasons that Business owners need to answer as objective to go for SME IPO's. I shall elaborate in my next posts.

NOTE : Happy to Help

I am happy to help any founders who are looking at SME IPO, please do ping me for a personal call.

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