Gujarat SMEs command 26% of India’s IPO funds

AHMEDABAD: The recent surge in Indian equity markets and attractive returns on investments have sparked a heightened interest among investors in stock investments. Against this backdrop, initial public offers (IPOs) from small and medium enterprises (SMEs) from Gujarat have witnessed significant growth in fiscal year FY 2024, raising Rs 1,609 crore.This amount constitutes 26% of the funds raised by SMEs across India through IPOs during the same fiscal year, totalling Rs 6,096 crore.
The number of SMEs from Gujarat opting for IPOs increased from 35 in FY 2023 to 53 in FY 2024, marking a notable rise of 51.4%. Concurrently, the funds raised by Gujarat’s SMEs through IPOs surged by 142% from Rs 664 crore in the previous fiscal year.
According to experts, this upward trend not only underscores the growing number of SMEs looking to expand their business operations but also reflects the robust ecosystem in Gujarat that supports entrepreneurial endeavours.
"FY 2023-24 witnessed a significant surge in Indian equity markets, particularly in small and mid-cap segments. Ultra-small caps like the SME segment also benefitted from this market rally, leading many SME promoters to tap the capital market for their financial requirements. As a result, the funds raised from the two SME platforms more than tripled, setting a record," said Gunjan Choksi, director of a stock broking firm in Ahmedabad.
Data from BSE Emerge and NSE Emerge reveals a noteworthy increase in the average number of funds raised per IPO from Gujarat. This surge indicates that individual SMEs are successfully attracting higher investments, buoyed by the positive market sentiment and heightened investor interest in SME IPOs.
The SME sector plays a vital role in the Indian economy, contributing significantly to employment generation, innovation, and exports. The uptick in fundraising through SME IPOs suggests that SME companies are leveraging the equity route to get funds to fuel their growth.
Investors, too, are increasingly recognizing the potential of SMEs and are willing to invest in their growth stories. Last year, many SME IPOs received a substantially higher number of applications than their issue size, signalling strong investor confidence in these ventures.