NSE Emerge is now the largest SME exchange of India by way of fund raising and market cap, while BSE is leading in number of listed companies.
Mumbai: Stocks listed on the SME platforms of the BSE and NSE had already drawn deeppocketed investors because of the massive returns they generated. Now, bulge-bracket funds such as Reliance, HSBC, Elara Capital, and DSP could be looking at these potential multi-baggers in a diversification strategy that steps beyond sheer liquidity.
SME IPOs have faced liquidity challenges, but several of these share-sales outperformed mainboard listings over a period.
SME stocks have given an average 47 per cent return in FY 2017-18, compared with 107 per cent in the previous financial year. About 15 stocks that listed in FY18 have rallied between 100 per cent and 2,000 per cent.
Interestingly, it is not only retail investors who are keen on these offerings. Ace investors such as Nikhil Vohra from Sixth Sense Ventures, Chandir Gidwani of Centrum Group, former Standard Chartered Bank Asia Chief Jaspal Bindra, Madhusudan Kela and Sunil Singhania, former fund managers of Reliance Capital; Ramesh Damani, Member of BSE; Mukul Agarwal of Param Capital and Porinju Veliyath are some of the new breed of ace value investors investing in SME IPOs.
Now, even foreign institutional investors (FII) and domestic mutual funds are seen applying for some of these public offers. FIIs such as Maven India Fund, Elara Capital, Kuber India, and India Max Investment Fund are some of the investors in SME stocks.
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“As Infosys and Wipro created history in the last 20 to 22 years by creating multi-fold wealth for investors, many SME companies will create more wealth in the long term,” said Gaurav Jain, Director, HEM Securities. “Investors who have held the stocks for long term have got handsome returns on their investments”.
The average return on SME companies listed in FY16 is 199.52 per cent. On the same comparison, the returns from companies listed on the main board stood at 36.34 per cent.
NSE Emerge is now the largest SME exchange of India by way of fund raising and market cap, while BSE is leading in number of listed companies. Currently, 241 stocks are listed on BSE, and 148 on NSE.
