On September 19, LT Elevator, a Kolkata-based company specializing in urban parking solutions and escalators, made a strong debut on the stock exchanges, listing at a 75% premium over its issue price. This marked its entry as the 624th company on the BSE SME platform. The initial public offering (IPO), amounting to ₹39.4 crore, was met with overwhelming interest, being oversubscribed nearly 183 times, with substantial participation from non-institutional and retail investors.
For enterprises like LT Elevator, the BSE SME and NSE Emerge platforms provide critical funding opportunities, enabling medium, small, and micro enterprises (MSMEs) to raise capital and expand operations. Since its establishment in 2012, the BSE SME has seen over 600 companies raise a total of ₹11,660 crore as of September 24, while 663 companies on the NSE platform have secured ₹19,450 crore as of August 31. In recent years, there has been a notable upward trend in both the number of IPOs and the speed of listings on these platforms.
In FY15, only 36 issuances were recorded in the BSE SME segment, while that number soared to a high of 78 in FY25. As of the first half of this year, 59 MSMEs were listed, and projections suggest that last year’s figures will be surpassed. The initial 100 listings took 40 months with around ₹740 crore raised, whereas the 500th to 600th listings occurred within just 15 months, accumulating ₹4,000 crore. The migration of a third of these companies to the mainboard underscores the positive effects of capital raising.
Aditya Vision, a consumer appliances retailer that listed on the BSE SME platform in 2016, later transitioned to the mainboard in 2021 and subsequently joined the NSE mainboard last year. Yashovardhan Sinha, Chairman and Managing Director, noted that the listing was pivotal for the company, enabling it to raise ₹5.8 crore in the IPO and further secure ₹18 crore in debt, thus enhancing its growth capacity.
While the SME platforms initially aimed to facilitate access to funds with relaxed financial criteria—including a minimum net tangible asset and net worth of ₹1 crore—the rapid oversubscription and instances of financial mismanagement prompted regulatory intervention. Consequently, eligibility requirements were tightened: net worth criteria now necessitate ₹1 crore for the preceding two financial years, and net tangible assets must be at least ₹3 crore for the last financial year.
New stipulations include evidencing operating profit in two out of three years, a leverage ratio of no more than 3:1, appointing a monitoring agency for issues above ₹50 crore, and prohibiting loan repayments to promoters or related entities. Furthermore, the offer for sale is capped at 20% of the issue size, with a minimum of 20% equity shareholding from promoters locked in for three years and a requirement of at least 200 investors per IPO.
The regulatory tightening has resulted in higher-quality issuances, according to Shripal Shah, MD of Aryaman Financial Services, which has overseen approximately 100 SME issuances. He remarked that companies recognizing the value of transparency have benefitted in terms of funding and growth.
Parth Shah, Director at Smart Horizon Capital Advisors, echoed this sentiment, highlighting that a filtration system is effectively assessing proposals, with a limited acceptance rate. Investment bankers are now tasked with ensuring documentation and disclosures are compliant with regulations. Trust in SME IPOs is evidenced by continued strong subscription levels despite tightened regulations.
Bushra Khan, Director of Paradeep Parivahan, a logistics service provider that listed on the BSE in March, expressed that the structured process built confidence in the system, aided by thorough support from the BSE team.
BSE CEO Sundararaman Ramamurthy indicated that further regulatory enhancements are under consideration to improve transparency and accountability, particularly regarding the roles of merchant bankers and the disclosure of fund utilization. An AI tool has been developed to scrutinize offer documents, flagging discrepancies and expediting the approval process, reducing turnaround time from over three months to approximately 45 days.
As MSMEs represent 30% of India’s GDP and 36% of manufacturing output, Ramamurthy emphasizes their economic significance. He stated, “If even 60,000 out of 6 crore companies in India get listed, it will create significant wealth and capital for the nation.” In light of this, BSE is actively promoting the benefits of listing to SMEs to further enhance their contributions to the economy.
Published on September 29, 2025.
