Gujarat-based SMEs (small and mid-size enterprises) raised Rs 645 crore through IPOs in the financial year 2022-23 and generated an average return of 31.8%, outperforming SMEs in the rest of the country which raised Rs 1,500 crore with an average return of 5.8%.
In a recently published report by Pantomath Capital Advisors Pvt Ltd, the spotlight drew attention to 33 SMEs in the state, which generated (through IPOs) an average return of 31.8%. This tallied six times the average return by SME IPOs from 84 companies across the rest of India. Significantly, the 2022-23 fiscal has seen the highest SME IPOs in the last four years.
“Gujarat has been a significant contributor to the public listing market. Once listed, companies based out of the state tend to generate better returns. In 2021-22, about 69 SME IPOs raised Rs 944 crore,” shared Mahavir Lunawat, MD, Pantomath.
“The market witnessed a significant jump in the number of IPOs and the funds raised on the SME Exchanges this year. On the other hand, the number of mainboard IPOs and the amount of equity fund raised through public listings during FY22-23 remained subdued, largely on account of market sentiments and global uncertainties,” added Lunawat. He forecasts a flurry of IPOs, especially in the second quarter of FY23-24.
According to Viral Mehta, the west zone head of a stock broking firm, SME IPOs now generate significant interest among investors and funding is also easily available in SME category. Gujarat-based SMEs opt for listings with proper future projections and thus gain to attract higher applications and returns.”
Pointing out the moving of many SMEs to mainboard after initial years, Gunjan Choksi, director of a stock broking firm, opined: “This increases the confidence of investors. Gujarat-based SMEs have shored up returns as high as 218% after listing in the financial year 2022-23.”
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