Understanding the Untapped Potential of SME Listing in India’s Capital Market
SPEAKER: MR. GAGANDEEP SINGH, SMART RISEN | Co-Partners at Leela Fincare
Whenever we hear a new word or concept, our first instinct is often to Google its meaning and move on. But rarely do we stop to understand its depth, its potential, its position in the economy, and its future possibilities. To truly unpack the full picture, the “what”, the “why”, and the “what next” of SME listing, we had Mr. Gagandeep Singh, who delivered a wonderful and insightful session. Let’s move forward to dive into the depth of the session and the takeaway from it.
After spending over a decade addressing business leaders across India, one message has remained consistent in every session I’ve conducted: there exists a powerful opportunity for India’s small and medium enterprises (SMEs) to raise capital and build a legacy by getting listed on stock exchanges. And yet, many promoters remain unaware of this very path that could transform their company’s future. Let me be very clear, at the start, we are not here to sell you anything. We’re not here to extract value from you. We are here to share knowledge that could help you grow your company and secure its future.
The Underused Gem of the Capital Market
Let me ask: how many of you know about the SME listing platform, a dedicated mechanism created to help smaller companies raise capital by listing their shares on the Indian stock market? Only about 10–15% of business owners in most audiences raise their hands when I ask this. And that’s alarming, because this platform has existed since 2012. From 2012 to 2025, around 1,200 companies in India have listed through this channel. It’s jointly operated by both NSE (through NSE Emerge) and BSE (through BSE SME), specifically for businesses like yours. But why was this platform created in the first place?
The Origin: A National Need Recognized in 2008
In 2008, a task force evaluated how to support the rapidly growing MSME sector. Private equity offered some support, but investors had no easy exit. Promoters were stuck with limited capital mobility. The result? The government tasked NSE and BSE to create a simpler listing process, without needing to meet the strict criteria of main board listings. This meant that even if your company wasn’t worth ₹1,000 crores, you could still access public capital, without dilution of control and with complete regulatory backing.
The Confidence Gap in MSMEs
So, what’s holding MSMEs back? The hesitation often stems from fear of compliance and a lack of confidence in being market-ready. There’s a misconception that compliance is burdensome. But the truth is, compliance protects you. It keeps your company transparent, efficient, and accountable. Many promoters still treat their companies as personal assets. But a fundamental accounting principle states: the promoter is not the company. As promoters, we are custodians, not owners. If your next generation isn’t interested in taking over, what happens to your life’s work? You slowly wind down operations, and your legacy fades. But listing your company can institutionalize its growth, attract professionals, and eventually even inspire your children to come back and run the company—yes, it happens more often than you think.
India: Still the “Sone Ki Chidiya” (Golden Bird)
We live in a country that is currently the fastest-growing major economy in the world. There is investment pouring into infrastructure, housing, and consumption—opportunities everywhere. So why is the MSME sector still hesitant? Lack of awareness. Even in metros like Mumbai, promoters are unaware of basic MSME schemes, government subsidies, or the opportunity of SME listings. Finance is not just for CAs—it’s a tool for decision-makers. Hire people who know the domain. Seek help. There’s no shame in that. I never thought I’d work in capital markets, and yet here I am, 12 years deep, speaking from experience.
How Simple Is It to List? Let’s Break It Down
This platform was designed with simple eligibility:
Track record of 3 years
Profitability of at least ₹1 crore (or even just positive profits in some cases)
The company should be a Private Limited or Public Limited company.
Previously, even proprietorships or partnerships could apply, but now the rules are stricter. To list, you must convert into a company and provide a full year of audited financials. A SEBI-registered merchant banker must manage the listing process. From documentation to disclosures, everything is handled professionally. And transparency is not punished, non-disclosure is. You will not be penalized for past errors if you’ve disclosed them properly.
Profit Matters, Not Just for You, But for the Market
Too many promoters think: “Why show profit? Why pay more tax?” But today, market valuation depends on your Profit After Tax (PAT). If your business isn’t profitable on paper, your market worth won’t grow, no matter how successful you seem. Investors don’t own your company—they own shares in it. On the SME platform, you’re only required to dilute 25% of your company. You keep 75% control. So why miss out?
Not Every Eligible Company Will Succeed, but Every Successful One Starts with Eligibility
Just because you’re eligible doesn’t mean you’ll list successfully, just like having a visa doesn’t guarantee entry into a country. But if you’re eligible, you have a shot. That’s more than most have.
Raise capital in two ways:
Issuing fresh equity
Selling existing shares
SME listing allows both.
However, unlike the main board, on SME platforms:
You can’t trade single shares.
The minimum investment is ₹1 lakh (usually in lots).
You must buy at least 2 lots, as per current SEBI guidelines.
Yes, it’s a higher risk asset class, but with high potential.
Beyond Capital: The Hidden Benefits of Being Listed
Once listed, your company is visible on a national trading terminal. Every time your company gets media coverage or lands a new order, your brand value skyrockets. You don’t need ad budgets for this; a simple news disclosure can create buzz. That’s the power of visibility. Look at Coca-Cola, still a listed company, still hasn’t disclosed its formula. Your secrets stay safe. What changes is your market perception.
Final Thought: The Capital Market Is Here to Support Your Dreams
As a promoter, you have the power to grow, institutionalize, and build a legacy. If your next generation isn’t ready yet, create a structure that attracts them back. India is a “Sunehri Chidiya”, it always has been and always will be. Before you leave this article, promise yourself one thing: spend time learning about this platform. Study what NSE Emerge and BSE SME offer. Ask yourself: Am I eligible? Could this be my growth path? If not you, maybe your children.
And remember, only two entities in India can print money:
The Reserve Bank of India, and
The Promoter of a growing company.
You hold that second power.
Here, we come to the end of the wonderful session. For the next session given by industry leaders at Paintvision Global Business Summit & Awards 2025, visit Industrial Front.