Kolkata, Aug 29 (KNN) The micro, small and medium enterprises (MSMEs) are now realizing that the IPO route is a better option than private borrowings or funding from banks, BSE SME head Ajay Thakur has said.

Thakur, recently addressing an event in West Bengal, said in the next three months, as many as 21 companies from the MSME sector would get listed on the BSE SME platform.

Of this, West Bengal's MSMEs would account for nearly half the listings on the exchange. The forthcoming consolidated IPO size of these 10 firms from Bengal is expected to be between Rs 1.5 billion and Rs 2 billion.

The West Bengal government has signed a pact with BSE and NSE to raise awareness among the State’s MSMEs to tap the capital market as an alternate funding source.

Thakur said that such companies from certain states like Bengal have traditionally relied on bank loans, borrowings from individual lenders and own capital to fund growth or meet their working capital needs.

"This is changing now. Out of the 259 companies which are listed on the SME platform, 18 are from this state. Interestingly, two of the largest IPOs on the platform came from firms in West Bengal. They are now realizing that the IPO route is a better option than private borrowings or funding from banks," Thakur said.

He said it was a myth that only large companies could be listed. West Bengal, being the largest hub of SMEs, would benefit immensely because of this MoU.