BSE launches SME index; Muniyappa bells ceremony

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SME Times News Bureau | 14 Dec, 2012
The Bombay Stock Exchange (BSE) Friday launched the BSE SME Index, dedicated to Small and Medium enterprises (SMEs) in the country, to track and measure the growth of the companies over a period.

Minister of State (Independent Charge) for MSMEs, K. H. Muniyappa inaugurated the first BSE SME IPO Index with bell ringing ceremony in Mumbai today, reports media.

"And based on the report, people can invest in these companies, which will not only help the organisations to grow their businesses but also create employment," Muniyappa said.

Typically, SME companies in the country have had to rely on debt financing from banks or non-banking financial institutions as equity capital was largely inaccessible to them.

"This time, the government, SEBI and the stock exchanges have put in a lot of efforts to make the third attempt a success. But with the SME platform, companies will not have to rely on loans from banks, but can raise funds through the market and play an important role in contributing to the economic growth of the country," he said.

Out of the 11 companies listed so far, 10 are trading above their issue prices, while one is below its IPO price.

The minister said, "SMEs in India constitute an important segment of Indian economy. Currently, the contribution of SMEs alone has been greater than 7 percent to GDP and 45 percent to industrial production. It is also the second largest provider of employment after agriculture."

SMEs also contribute to 40 percent of total exports directly and a significant amount of exports indirectly through large trading houses or third parties, he added.

He said, "The small companies coming under MSME Sector face several difficulties in their quest for growth and accordingly to address these issues, UPA Government under the able guidance of Respected Madam Sonia Gandhi Ji, Hon’ble Chairperson, UPA and the stewardship of Hon'ble Prime Minister Dr. Manmohan Singh Ji had constituted a task force which recommended setting up of a dedicated stock exchange / platform for SMEs."

"With the launching of BSE SME IPO Index today, we have gone one step further to facilitate investor capital and create wealth for all the stakeholders. The stock exchange should provide necessary support for skill development in this sector and work to provide safety mechanism to SME investors in the segment which would then lead to exponential growth in this sector," he added.