SMEs Embrace Capital Markets for Funding, Raise Rs 11,000 Crore

Small and Medium Enterprises (SMEs) are increasingly seeking funding through capital markets. As of June 2024, 780 SMEs are listed on the NSE and BSE, raising approximately Rs 11,000 crore, according to a senior official. The combined market capitalisation of these SMEs now surpasses Rs 1.6 lakh-crore, said Shekhar Chaudhary, director of the financial markets division at the department of economic affairs.

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Capital Markets' Role in Economic Growth

Speaking at the 10th edition of the CII East Capital Markets Conclave, Chaudhary highlighted the crucial role capital markets play in India's economic development. A report on SME Initial Public Offerings (IPOs) was unveiled during the event. Experts discussed how capital markets could drive India's economic future by enabling SMEs to significantly contribute to the country's GDP, according to a statement.

Chaudhary also mentioned that in the social enterprise sector, nine NGOs have raised Rs 12 crore through a social exchange platform. Currently, around 100 NGOs are registered with the NSE and BSE, preparing for future fundraising efforts.

Regional Contributions and Future Prospects

West Bengal contributes 5 per cent of the total Assets Under Management (AUM), ranking among the top 10 states in terms of per capita penetration. Kolkata is among the top five cities for AUM contribution, Chaudhary added. Kamala K, chief regulatory officer of BSE India, expressed confidence that capital markets will be pivotal in India's journey toward becoming a developed nation by 2047.

The event underscored how SMEs are leveraging capital markets for growth. The discussions emphasised that empowering SMEs through these markets can lead to substantial contributions to India's GDP.

The conclave also shed light on how social enterprises are benefiting from capital markets. The registration of NGOs with NSE and BSE indicates a growing trend towards using these platforms for fundraising.

Experts believe that as more SMEs and NGOs tap into capital markets, their contributions to economic growth will become more pronounced. This trend is expected to continue as India aims for developed nation status by 2047.

The increasing participation of SMEs in capital markets reflects their growing importance in India's economy. With substantial funds raised and significant market capitalisation achieved, these enterprises are poised to play a key role in future economic development.

The conclave provided insights into how regional contributions like those from West Bengal and Kolkata are shaping the overall market landscape. These regions' active participation highlights their importance in the broader economic context.

The discussions at the event also pointed out that as more organisations register with stock exchanges, their ability to raise funds will improve. This will further enhance their capacity to contribute to economic growth.

The focus on empowering SMEs and social enterprises through capital markets aligns with India's broader economic goals. By facilitating access to funding, these markets are helping drive sustainable growth across various sectors.

The event concluded with optimism about the future role of capital markets in India's development journey. The insights shared highlighted the potential for significant contributions from both SMEs and social enterprises.