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Investors Are Falling Back in Love With SMEs. Here's Why

Investors Are Falling Back in Love With SMEs. Here's Why
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The part of market which often remains hidden from headlines is back in game with a lot better than many would think.

Since the launch of the BSE-SME segment, which was nearly about five years ago, the platform has witnessed an upsurge in companies filing draft papers for Initial Public Offers (IPOs). In the shorter span of time, some of the Indian SMBs have generated huge chunks of returns; with the best of its examples are Chandigarh-based Superfine Knitters Ltd., Kushal Tradelink, Supernova, Autumn and MCL.

According to the data of BSE-SME, this is to note that amongst the list of 200 companies in BSE-SME, in which 164 are already listed, and from that 164, 23 have been migrated to BSE’s main board, clearly shows that investors are keeping their focus on Indian SMEs post budget of the year.

Despite the reasons of having not so high capital structures and lack of transparency, there is a notable increase in investors betting on Small and medium enterprises. But what makes SMEs a niche focus is despite the high risk factor in Indian market, the earning potential is high in market.

Listed are the #5 reasons which disclose the fact why investors should continue investing in SMEs.

  • Good choice for making fixed returns

Investors, who are looking for companies suggest high return potential, should take the league forward with Indian Small and Medium Enterprises. Deeper understanding about the companies in this segment may prove to be profitable exercise for investors who are looking to invest in a bid to get fixed returns.  

  • Going Viable Digitally

Going digitally viable is a game-changer strategy which most of the SMEs have opted these days. A push of government to small and medium enterprises in Budget 2017 is also raising opportunities for small enterprises to create a big online marketplace. Even lot of global giants like Google and Facebook are encouraging Indian SMEs to go digitally stronger and tech-driven.

  • Positive impact on economy

Union Budget 2017 has been a welcoming year in favor of SMEs as we see rapidly increasing prospectus for IPOs in Asia’s biggest stock exchange board i.e. BSE in SME segment. Deduction in corporate tax rates and also a cut in Income Tax slabs have made an optimistic atmosphere for investments in SMEs’ market. Apparently, the Budget 2017 is quite an economically profitable one in the point of view SMEs in India, which encourages more investment in the said segment.  

  • Dawn of 2017 with key emerging trends

Year 2017 dawned with a variety of new emerging trends for small and medium enterprises which are going to upraise the investments in SMEs. Key trends like crowdfunding and niche ideas in smaller business industry will keep the confidence of small business owners up on scale. With lot of ways now in financing small business owners can possibly take a good lead in market.

  • Big Boost to SMEs from Government

At the cusp of 2016 and at the dawn of 2017, Prime Minister Narendra Modi gave a little hint to country about encouraging SMEs and MSMEs in his 31st December speech, which has remained the confidence up of a lot of investors in market. With tax relaxation and new incentives offered to small business owners, the government is also boosting SMEs to capture a big market space. 

 
Edition: June 2017

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