SME IPO | SME IPO is getting more profit, investors are getting attracted due to fair price

Mumbai: Investors are getting more benefit in public issues (IPO) of small and medium companies ie SME companies. The main reason for this is that SME IPO has to be brought at a reasonable price as compared to the IPO of big companies. While most of the large companies listed on the mainboard of BSE-NSE are launching IPOs at very expensive P/E Ratios of 50 to 100 or even more, most of the SME companies are trading in the range of 10 to 100. Bringing IPOs at cheap P/E ratios of 30 or less. That is, the promoters and merchant bankers of big companies are bringing IPOs at an expensive price with more greed, but the promoters and merchant bankers of SME companies are bringing IPOs at a reasonable price keeping the scope of profit for their investors. This is the reason why SME IPOs are earning well and the attraction of investors is increasing continuously. As a result these IPOs are getting tremendous support. Huge subscription of 100 times, 200 times or even more is being received and investors are getting handsome returns on the listing itself. The BSE SME IPO Index has gained 96% in the last 12 months and has now come down to 24,503 points after touching a new high of 26,645 points last month, while the BSE Sensex ( BSE Sensex) registered a gain of only 12% and reached 62,547 points. Strong subscription from investors Last Friday, the shares of Crayons Advertising got listed on NSE Emerge platform with a good gain of 45%. The IPO price of Crayons was Rs.65. While its stock closed at Rs 94 on the first day itself. In this way it has given a handsome return of 45 percent to the investors. The IPO of Crayons, a more than 3 decade old company, received a whopping subscription of 147 times from investors due to the IPO being floated at an affordable PE ratio of just 9. Its merchant banker was Corporate Capital Ventures. Earlier on May 26, investors got double profit in the IPO of Krishka Strapping Solutions, a steel company listed on NSE Emerge. The IPO price of Krishka Strapping was also very cheap. It priced the IPO at a PE ratio of just 7. Due to this, its IPO received a record 337 times investment. The merchant banker for Krishka Strapping’s IPO was Share India Capital. Last week on May 31, the IPO of Infollion Research Services was also heavily subscribed 260 times. The cloud segment’s more than a decade-old company was priced at Rs 82 with an IPO price of Rs 14 and a PE ratio of Rs 14. Holani Consultants was the merchant banker for the Infolion IPO and its shares will be listed on June 8. read this also Profit in some, loss in some The number of SME IPOs is increasing due to the increasing interest of investors. In 2022, IPOs of about 109 SME companies came, through which capital of Rs 1,875 crore was raised. And in 2023, around 50 SME IPOs have raised capital of around Rs 900 crore so far. However, not all IPOs are profitable, but many IPOs are also facing losses due to weak fundamentals or high prices. Out of 50 IPOs listed this year, shares of 34 companies are running at a profit. While 16 are at a loss. Similarly, a total of 129 IPOs came in the financial year 2022-23. Out of which only 83 IPOs are profitable, in the remaining 46 IPOs, investors are also facing losses. Companies that have given the highest returns. They include MacPhos, KwikTouch, Lead Reclaim, Exhicon, Makon Chemicals, Quality Foils, Infinium Pharma, InnoCage India, Srivasavi Adhesives, Sistango Techno, Shera Energy, De Nirs Tools, Retin Paints and Ducon Organics. In which good returns of 40 to 200 percent are being received. On the contrary, the IPOs of AG Universal, Viaz Tyres, Agarwal Flatglass, Aristo Bio, Indog Tea, Patron Exim, Amanya Ventures are also witnessing losses ranging from 10 to 60 percent. The need to invest very carefully Experts say that be it SME or Mainboard IPO, there is a need to invest very carefully in any IPO. Otherwise there can be loss instead of profit. One should invest in companies whose fundamentals look strong and the IPO price is cheap. Only then there is scope for profit. By the way, it is necessary to be more careful in SME IPOs because according to SEBI rules, due to the large lot size, the minimum investment has to be more than Rs 1 lakh, whereas in mainboard IPOs of big companies, the minimum investment is only Rs 15,000. For this reason, if you invest in a bad SME IPO without due diligence, then there can be huge losses. Some merchant bankers are bringing IPOs at very reasonable prices. Therefore, to avoid risk, the investor should also check the track record of the merchant banker.

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