Easy Listing Norms To Prompt Vcs To Invest In Smes

Share: Small-ticket private funds and mid-sized venture capitalists (VCs)
, who are willing to invest in SMEs, are likely to make some gains this time with the help of the recently announced SME listing norms introduced by the Securities and Exchange Board of India (SEBI).
Investors and mid-sized private capitalists, who have shown a keen interest in making seed and growth-stage investments in SMEs, can benefit immensely from the new disclosure and listing norms. The relaxation of listing regulations by SEBI ensures that investors and VC firms can take the exit option easily in these otherwise cash-starved SMEs, said Sanjeev Somany, director of Somany Securities, a small-sized trading house in New Delhi.
Anil Bhardwaj, secretary general of the Federation of Indian Micro and Small & Medium Enterprises (FISME), stated that the easier listing norms will make it easier for the companies to consider public fund raising upon reaching a decent size.
So far, the absence of an easy exit route in the SME sector and longer investment time-frame were some of the factors that hindered the private investors and VCs from making seed and growth-stage investments. However, the assurance of a profitable exit option will bring back the interest of the VCs to make seed and growth funding, said Anuj Kumar, financial analyst at WiseInvestments, a small-sized financial advisory firm in Jaipur.
Financial firms believe that once the listing norms are implemented, several investment firms will be reworking their strategies to tap more investment opportunities in SMEs over the next few years.
by: David Parks
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