SME IPOs Gain Traction As Subscriptions And Listing Increases

Mumbai, Aug 16 (KNN) Small and Medium Enterprises-dedicated exchanges of NSE Emerge and BSE SME platforms, with issues getting massively oversubscribed and good listing gains, reported Businessline.

Oriana Power in its recent initial public offering has received a bid worth a stunning Rs 7,000 crore for an issue size of Rs 60 crore.  

It provides solar energy solutions to industrial and commercial customers.

Its anchor investors include marque investors such as Morgan Stanley Asia (Singapore) PTE, India-Ahead Venture Fund and Aryabhata Global Asset Funds.

True to the run-away response, Oriana Power shares made a dream debut to list at Rs 302 a piece on NSE Emerge against the issue price of Rs 118. An investment of Rs 1.41 lakh in one lot of 1,200 shares had fetched investors Rs 3.62 lakh. It closed at Rs 301 last Monday.

Krishca Strapping Solutions, a manufacturer of high-tensile steel straps and seals, mopped up a response of Rs 4,391 crore against an issue size of Rs 20 crore. The stock which was sold at Rs 54 a piece got listed at Rs 119 and is now trading at Rs 220.

Manish Chowdhury, Head of Research, StoxBox said the attractive valuation of SME companies compared to similar companies on the main board an opportunity to invest in new age and non-conventional businesses play a key role in the huge demand for SME IPOs.

Though SME issues look lucrative, investors with only a high-risk appetite and long-term perspective should venture into these due to liquidity constraints on the SME platform and the smaller scale of operations of these companies, he added.

Shripal Shah, Director of Aryaman Financial Services, said the SME IPO space had delivered strong returns for investors and attracted the participation of the alternative investment community, including family office funds, UHNIs and AIFs.

The trend of SME IPOs being broadly subscribed by a vast investor base has just begun. If the quality of issuances, including that of fundamentals and pricing are maintained, this trend may grow further, he added.  (KNN Bureau)