{"id":4403,"date":"2023-06-14T10:14:20","date_gmt":"2023-06-14T10:14:20","guid":{"rendered":"https:\/\/www.paytmmoney.com\/blog\/?p=4403"},"modified":"2023-06-14T10:19:09","modified_gmt":"2023-06-14T10:19:09","slug":"explore-sme-ipos-what-are-they-how-to-apply","status":"publish","type":"post","link":"https:\/\/www.paytmmoney.com\/blog\/explore-sme-ipos-what-are-they-how-to-apply\/","title":{"rendered":"Explore SME IPOs: What Are They And How To Apply"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Small and Medium Enterprises (SMEs) play a vital role in the economic growth of India. In recent years, SME Initial Public Offerings (IPOs) have gained traction, providing retail investors with unique opportunities. This blog aims to highlight the benefits of SME IPOs for retail investors in India, discuss key considerations while applying for such offerings, and provide examples of successful SME IPOs from the past year.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let us quickly learn a few key terms about IPOs first :<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><strong>Exchange:<\/strong> <span style=\"font-weight: 400;\">The stock exchange where the IPO shares are proposed to be listed. Mainline IPOs are listed on BSE and NSE. The SME IPOs are listed on the NSE EMERGE or BSE SME platform of the respective exchanges.<\/span><\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><strong>IPO Open Date \/ Issue Close Date:<\/strong> <span style=\"font-weight: 400;\">The opening and closing date of the IPO bidding process. Investors can apply for an IPO during this time only.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><strong>Lot Size:<\/strong> <span style=\"font-weight: 400;\">The minimum count of shares an investor can apply for in an IPO. Example &#8211; A lot size of &#8216;400&#8217; means that an investor needs to bid for at least 400 shares.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><strong>Issue Price:<\/strong> <span style=\"font-weight: 400;\">The price per equity share. There are 2 types of IPOs- Book Building and Fixed Price IPOs. Book Building IPOs will have a price range, say Rs 120-125, and investors need to bid within the price range. A fixed price issue has a specific price to bid.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><strong>Issue Size:<\/strong> <span style=\"font-weight: 400;\">The total monetary value of the IPO. It is arrived at by multiplying the number of shares offered by the company by the issue price per share.<\/span><\/span><\/li>\n<\/ul>\n<h2><strong>1. What do SME IPOs offer retail investors?<\/strong><\/h2>\n<ul>\n<li>\n<h3><span style=\"font-weight: 400;\">Growth Potential and Wealth Creation:<\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">SME IPOs offer retail investors the chance to invest in small companies during their early stages of growth. These enterprises often have promising business models and robust growth plans. By participating in SME IPOs, retail investors can potentially reap substantial rewards as the companies expand and gain market share.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One notable example is the IPO of <\/span><span style=\"font-weight: 400;\">Phantom Digital Effects Limited<\/span><span style=\"font-weight: 400;\">. The IPO witnessed impressive listing gains of 229.16%!<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">( Source : <\/span><a href=\"https:\/\/www.chittorgarh.com\/ipo\/phantom-digital-effects-ipo\/1322\/\"><b>https:\/\/www.chittorgarh.com\/ipo\/phantom-digital-effects-ipo\/1322\/<\/b><\/a><b> , listing date: Oct 21, 2022 <\/b><span style=\"font-weight: 400;\">)<\/span><\/p>\n<ul>\n<li>\n<h3><span style=\"font-weight: 400;\">Portfolio Diversification:<\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Investing in SME IPOs allows retail investors to diversify their portfolios beyond large-cap and mid-cap stocks. SMEs operate in diverse sectors, providing an opportunity to balance risk by adding exposure to different industries and growth drivers. This diversification helps reduce vulnerability to market fluctuations.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For instance, the IPO of Agni Green Power Limited, a green energy solar PV platform, provided retail investors with an opportunity to participate in the booming sustainable green solar energy segment, diversifying their investment portfolios beyond traditional sectors. Also, the IPO witnessed 162% listing day gains and the stock price is up from listing price as of date: 12-June-2023.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">(Source : <\/span><a href=\"https:\/\/www.chittorgarh.com\/ipo\/agni-green-power-ipo\/1273\/\"><span style=\"font-weight: 400;\">https:\/\/www.chittorgarh.com\/ipo\/agni-green-power-ipo\/1273\/<\/span><\/a><span style=\"font-weight: 400;\"> , listing date : Aug 01, 2022 and stock price as of date : 12-June-2023)<\/span><\/p>\n<ul>\n<li>\n<h3><span style=\"font-weight: 400;\">Access to Promising Sectors:<\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">SME IPOs often emerge from sectors with high growth potential that are yet to be fully explored. Retail investors can seize the opportunity to invest in these sectors and capitalize on their future prospects.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, the IPO of Droneacharya Aerial Innovations Ltd in December 2022 showcased the potential of the drone industry. The company&#8217;s strong IPO performance, with the stock price nearly tripling within a short span, demonstrated the rewards of investing in a promising sector.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">(Source: <\/span><a href=\"https:\/\/www.chittorgarh.com\/ipo\/droneacharya-aerial-innovations-ipo\/1348\/\"><span style=\"font-weight: 400;\">https:\/\/www.chittorgarh.com\/ipo\/droneacharya-aerial-innovations-ipo\/1348\/<\/span><\/a><span style=\"font-weight: 400;\"> , listing date : Dec 23, 2022 and stock price as of date : 12-June-2023)<\/span><\/p>\n<ul>\n<li>\n<h3><span style=\"font-weight: 400;\">Potential for Higher Returns:<\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Given their growth potential, SME IPOs can offer higher returns compared to well-established companies. As these companies expand and capture market share, their valuations may increase significantly. Retail investors who identify promising SMEs and participate in their IPOs stand a chance to benefit from this potential upside, possibly yielding attractive returns on their investments.<\/span><\/p>\n<ul>\n<li>\n<h3><span style=\"font-weight: 400;\">Support to Small Businesses:<\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">By investing in SME IPOs, retail investors provide vital capital to small businesses, which can be crucial for their growth and development. Your investment plays a part in fostering entrepreneurship, creating job opportunities, and contributing to the economy. SMEs often operate in niche sectors, making them the backbone of innovation and diversification in the market.<\/span><\/p>\n<h2><strong>2. What should a person keep in mind while applying for an SME IPO?<\/strong><\/h2>\n<ul>\n<li>\n<h3><span style=\"font-weight: 400;\">Company Analysis:<\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Thorough research and analysis of the company&#8217;s fundamentals are crucial. Evaluate the business model, competitive advantage, and growth prospects. Review financial statements, such as revenue growth, profitability, and debt levels.<\/span><\/p>\n<ul>\n<li>\n<h3><span style=\"font-weight: 400;\">Management Quality:<\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Assess the competence and experience of the company&#8217;s management team. Evaluate their ability to execute growth plans and navigate challenges. The management&#8217;s track record and domain expertise play a significant role in the company&#8217;s success. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, the IPO of Infinium Pharmachem in April 2023 showcased the importance of a strong management team. The company&#8217;s management expertise in the pharma industry and its focused growth strategy contributed to its successful IPO debut.<\/span><\/p>\n<ul>\n<li>\n<h3><span style=\"font-weight: 400;\">Market Sentiment and Timing:<\/span><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Consider the prevailing market sentiment and economic conditions. Assess whether the market environment is conducive to IPO investments. Additionally, analyze the demand for the IPO and oversubscription levels. An oversubscribed IPO indicates market confidence in the company.\u00a0<\/span><\/p>\n<h2><strong>3. Top 10 SME IPOs by performance listed this year 2023 :<\/strong><\/h2>\n<figure id=\"attachment_4404\" aria-describedby=\"caption-attachment-4404\" style=\"width: 992px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"wp-image-4404 size-full\" src=\"https:\/\/paytmmoney.wpengine.com\/wp-content\/uploads\/2023\/06\/table-6.png\" alt=\"\" width=\"992\" height=\"784\" srcset=\"https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/06\/table-6.png 992w, https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/06\/table-6-300x237.png 300w, https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2023\/06\/table-6-768x607.png 768w\" sizes=\"(max-width: 992px) 100vw, 992px\" \/><figcaption id=\"caption-attachment-4404\" class=\"wp-caption-text\">Source : (https:\/\/www.chittorgarh.com\/ipo\/ipo_perf_tracker.asp)<\/figcaption><\/figure>\n<h2><strong>4. How to apply for SME IPOs<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">On the website, surf to : <\/span><a href=\"https:\/\/www.paytmmoney.com\/stocks\/ipo\"><span style=\"font-weight: 400;\">https:\/\/www.paytmmoney.com\/stocks\/ipo<\/span><\/a><span style=\"font-weight: 400;\">. You can apply for IPOs mentioned with the SME IPO tag.\u00a0<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Open the Paytm Money app or website: <\/span><a href=\"http:\/\/www.paytmmoney.com\"><span style=\"font-weight: 400;\">www.paytmmoney.com<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">From the home screen, scroll the headers to IPOs in the last<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Scroll down to the IPOs and NFOs section, and apply from there<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">\u00a0You can apply for IPOs mentioned with the SME IPO title.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Choose your quantities and bid price and place your application successfully!<\/span><\/li>\n<\/ol>\n<h3><span style=\"font-weight: 400;\"><strong>Conclusion:<\/strong>\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">SME IPOs present retail investors in India with a unique avenue to participate in the growth potential of small and medium-sized enterprises. By investing in SME IPOs, retail investors can access promising sectors, diversify their portfolios, and potentially achieve substantial gains. However, it is essential for investors to conduct thorough company analysis, assess management quality, and consider market conditions before participating in SME IPOs. With proper research and prudent decision-making, retail investors can leverage the advantages of SME IPOs to enhance their investment portfolios and capture the growth potential of promising small businesses.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>Disclaimer:<\/strong>\u00a0<\/span><span style=\"font-weight: 400;\">Investments in the securities market are subject to market risks, read all the related documents carefully before investing. <\/span><span style=\"font-weight: 400;\">The securities are quoted as an example and not as a recommendation<\/span><span style=\"font-weight: 400;\"> This content is purely for information purpose only and in no way to be considered as an advice or recommendation. Paytm Money Ltd SEBI Reg No. Broking \u2013 INZ000240532. NSE (90165), BSE(6707) Regd Office: 136, 1st Floor, Devika Tower, Nehru Place, Delhi \u2013 110019. For complete Terms &amp; Conditions and Disclaimers visit:<a href=\"https:\/\/www.paytmmoney.com\/\"> https:\/\/www.paytmmoney.com<\/a>.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Small and Medium Enterprises (SMEs) play a vital role in the economic growth of India. In recent years, SME Initial Public Offerings (IPOs) have gained traction, providing retail investors with unique opportunities. This blog aims to highlight the benefits of SME IPOs for retail investors in India, discuss key considerations while applying for such offerings,<a href=\"https:\/\/www.paytmmoney.com\/blog\/explore-sme-ipos-what-are-they-how-to-apply\/\">Continue reading <span class=\"sr-only\">&#8220;Explore SME IPOs: What Are They And How To Apply&#8221;<\/span><\/a><\/p>\n","protected":false},"author":24,"featured_media":4405,"comment_status":"open","ping_status":"open","sticky":false,"template":"single-classic-ns.php","format":"standard","meta":{"footnotes":""},"categories":[15,6],"tags":[],"class_list":["post-4403","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ipo","category-personal-finance"],"_links":{"self":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts\/4403","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/comments?post=4403"}],"version-history":[{"count":0,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts\/4403\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/media\/4405"}],"wp:attachment":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/media?parent=4403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/categories?post=4403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/tags?post=4403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}