Cohan Consultants LLP – Pune, MH, India

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SME IPO

SME IPO

SMEs are an important integral part of a developing country’s economy and play a significant role in any country’s sustainable growth. They are quickly becoming an optional asset class and the best & promising way of investment.

However, with boosted globalization, there is a lot of competition in nearly all major industries, in India. In order to maintain the competition while simultaneously promoting growth, it is important to have your business listing on BSE or NSE, in SME IPO, especially for small & medium businesses. They offer a new, promising, secured monetary funding source and allow companies to list with comparatively lower compliances, thereby resulting into the maintenance of positive cash flow for better sustainability, and asset generation.

Benefits

  • Improved Credibility and Visibility & The Recognition:
Listing on BSE and NSE increases visibility for those industries which are not well recognized. They have the chance to build more business prospects & gain trust in the market. This increases public awareness through media coverages and publicly accessible information, which leads to higher credibility & trustworthiness for the company.
  • Equity Dilution & Stakeholding:
You can dilute the equity as per the norms set and get your equity funds raised. Here you need to remember that equity funds are not a liability, so you do not have a compulsion to cater the equity funds. You just have to raise funds and can use them for business growth. Investors will get a return through capital appreciation, annually or with the period specified in the termsheets.

Benefits

  • Strong Balance Sheet:
It provides capital via equity funds, and there will be no cash outflow as you are not catering it. The company can use the funds for expansions, diversifications, acquisitions, and loan repayments, in exceptional cases. This results in a complete balance sheet, and makes it look healthier.
  • No Cash Outflow:
Listing entities can acquire the businesses just by equity swapping. There will be no cash flow from the buyer entity.
  • Use Equity AS Collateral :
You have an option to use equity as collateral in case you don’t want to dilute your values further. You can place it on the financial institutions and raise the funds, keeping in mind, that it will be a debt fund.