Small and medium enterprises (SMEs) have achieved a significant milestone in raising approximately ₹3,000 crore through an initial public offering (IPO) in the first half of 2024. This fundraising activity marks the highest sum of money raised within the first six months of the calendar year 2024, since the inception of the platform in 2012 on the BSE’s SME platform.

Retail investor enthusiasm, driven by the strong post-listing performance of SME stocks, has been a significant factor behind the robust fundraising in the SME segment. Initially, high net-worth individuals (HNIs) and savvy investors turned their attention to SME IPOs due to their promising returns. This shift in focus has been supported by an increase in dematerialised accounts across the country, indicating greater direct participation from retail investors

Differences exist between the SME platform and the Mainboard, thereby serving small ventures that wish to raise lower financial limits. However, unlike the Mainboard, the SME platform was brought into existence in 2012 to provide for distinct laws. For example, the smallest size should be around ₹1 lakh when it comes to SME issues, whereas it should be ₹15,000 as far as those of Mainboard are concerned.

The first half of 2024 has set a new benchmark for SME IPO fundraising. While the sector faces regulatory challenges and market fluctuations, the growing interest from retail and HNI investors signals a robust future for SME investments. As always, potential investors are advised to thoroughly understand a company and its prospects before committing to long-term holdings.