Small and medium enterprises (SMEs) are now fast becoming main investor attraction. Evidence can be seen from the way eight such IPOs were oversubscribed 20 times or more since January 2017. According to data provided by primary market tracker Prime Database, IPOs of smaller firms such as Chemcrux Enterprises Ltd, Focus Lighting and Fixtures Ltd and Global Education Ltd were oversubscribed by 57.41, 92.96, and 83.86 times respectively.
Since the beginning of this year, 31 firms have launched their IPOs on SME exchanges run by the Bombay Stock Exchange and National Spot Exchange of India. All of which have been oversubscribed. “Investors are now increasingly getting drawn to SMEs as these investors have made good returns in SME IPOs they had invested in previously. Most of such firms do not price their offers aggressively, leaving room for investors to make money,” said BSE SME, Ajay Thakur.
Riding high on growing interest by wider class of investors, including institutional investors, SMEs are now coming up with bigger IPOs. Interestingly, a foreign institutional investor also bid for 35 per cent of a recently concluded SME IPO. “SME platforms are getting IPOs of more than £5 million, which was perhaps not thought of 3 years back. Gujarat-based Euro India Fresh Foods recently raised approximately £5.1 million through SME IPO. Again, Zota Healthcare, incidentally from Gujarat, would be launching its IPO of £5.8 million,” said Mahavir Lunawat, group MD, Pantomath Capital Advisors.
