The Bombay Stock Exchange (BSE) on 14 December 2012 launched an SME index which primarily aims at tracking the current primary market conditions in the Indian capital market and measuring the growth in investors’ wealth over a period.
The index is going to be constituted by small and medium enterprises (SMEs) which are listed on the BSE SME platform. Presently, there are 11 companies which are listed on the SME platform and this index is going to have features similar to the BSE IPO index.
Through SME index the authorities can recognize the viability of the company and based on the report, people can invest in these companies, which will not only help the organisations to grow their businesses but also suppose to create employment.
Small and Medium Enterprises (SMEs) in India constitute an important segment of Indian economy. Currently, the contribution of SMEs alone is greater than 7 per cent to GDP and 45 per cent to industrial production. Small and Medium Enterprises (SMEs) is also the second largest provider of employment after agriculture.
SMEs also contribute to 40% of total exports directly and a significant amount of exports indirectly through large trading houses or third parties.
With the SME platform, companies did not have to rely on loans from banks, as they can raise funds through the market and play an important role in contributing to the economic growth of the country.
Out of the 11 companies listed so far, 10 are trading above their issue prices, while one is below its IPO price.
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