In 2021, the Indian market saw a surge in Small and Medium Enterprises (SME) IPOs, despite the pandemic’s economic impact. SMEs have emerged as a crucial contributor to India’s economic growth, with a considerable presence in sectors like engineering, chemicals, food processing, and technology. Many SMEs have been opting for IPOs to raise capital for expansion and diversification. We will provide details about some of the notable SME IPOs that were launched during the year and discuss the SME IPO in 2021.
Top SME IPO in 2021
Knowledge Marine & Engineering Works Limited
Knowledge Marine & Engineering Works Limited is a firm that concentrates on the construction of Marine Crafts and Marine Infrastructure Engineering work. The business operates in two divisions: the first one consists of possessing and running Marine Craft, while the other includes supplementary services like repairing and upkeep, technical labor force solutions, executing marine hydrographic and magnetometer surveys, and more.
The IPO was launched on March 9, 2021, closed on March 12, 2021, and was listed on the BSE SME on March 22, 2021. The face value was INR 10 per share, and the issue price was INR 37 per share. The lot size was 3000 shares, and the total issue size was 2,736,000 shares (aggregating up to INR 10.12 Cr). The KMEW IPO has been performing well since its listing, with orders worth INR 120 crores on hand.
BEW Engineering Limited IPO
BEW Engineering, founded in 2011, is a design and manufacturing company of filters and dryers for the chemical industry, including pharmaceuticals, agrochemicals, and specialty chemicals. The range of products offered comprises filtration, mixing, and drying machinery, sterile solutions, intermediate substances, agrochemicals, fine chemicals, pesticides, insecticides, dyes, as well as foodstuffs.
The company’s IPO, which closed on September 7, 2021, offered 684,000 shares, aggregating up to ₹3.97 crores, at a fixed price of ₹58 per share. The lot size is 2000 shares, and the listing is on the NSE SME. The IPO’s net proceeds will be utilized for additional working capital requirements and general corporate purposes.
CWD Limited IPO
CWD Limited is an ICT-based company that designs, develops, manufactures, and sells integrated solutions, with a strong focus on R&D. Its offerings can be divided into Smart Connectivity Modules, Connected Products, Electronics Design, Product Design, and Software Design. CWD has three subsidiaries and a wide product portfolio.
The IPO took place from Sep 30, 2021, to Oct 5, 2021, with a listing date of Oct 13, 2021, on BSE SME. The face value was ₹10 per share, with a price of ₹180 per share, and a lot size of 800 shares. A sum of 1,000,800 shares was offered in total, which included 850,800 shares as a Fresh Issue and 150,000 shares for an Offer for Sale.
Kotyark Industries Ltd IPO
Kotyark Industries, a biofuels manufacturing company, went public with an initial public offering (IPO) from Oct 21 to Oct 25, 2021, and had a listing date of Nov 2, 2021, on NSE SME. The face value of the shares was ₹10, and the issue price was ₹51 per share. The lot size was 2000 shares, and the total issue size was 2,208,000 shares, aggregating up to ₹11.26 Cr.
The company can produce 100,000 KL of biodiesel per month from Multi Feedstock and has been granted a letter of intent by the Government of Rajasthan, rural development, biofuel authority, and panchayat raj department. The company is the first mover in the bio-fuel segment and has a scalable business model, adheres to timely order fulfillment, has a strong relationship with suppliers, and offers environmentally friendly products with quality assurance and standards.
Rajeshwari Cans Limited IPO
Rajeshwari Cans Limited is a manufacturing company that specializes in producing printed tin containers of varying sizes for packaging materials, with customers in the tobacco and paint industries. All manufacturing operations of the business are conducted in the Mahagujarat Industrial Estate and Shree Ganesh Industrial Estate, which serve as the company’s production facilities.
The company went public with a fixed-price IPO from March 31, 2021, to April 6, 2021, and was listed on BSE SME on April 15, 2021. The IPO issue price was set at ₹20 per share, with a face value of ₹10 per share, and the lot size was 6,000 shares. The total issue size was 2,016,000 shares, with an aggregate value of ₹4.03 Cr. The IPO aimed to meet the company’s incremental working capital requirements and general corporate purposes.
Network People Services Technologies Limited IPO
NPST (Network People Services Technologies) is a service provider in the banking technology industry that delivers mobility solutions and software to the finance and banking sectors. Its flagship application, “TimePay,” provides digital payment solutions such as UPI and QR-based payments. Canara Bank, Syndicate Bank, and IBM India Private Limited are some of its marquee customers.
NPST’s IPO was listed on NSE SME on August 10, 2021, with a face value of ₹10 per share and a price range of ₹76 to ₹80 per share. The lot size for the IPO was 1600 shares, and the total issue size was 1,712,000 shares, aggregating up to ₹13.70 Cr. The IPO proceeds were used to develop TimePay mobile application, acquire IT hardware and equipment, undertake marketing and promotion of TimePay, and for general corporate purposes. The company’s financial performance for the past two fiscal years has been almost static. However, the post-pandemic era has seen an increase in mobile banking, providing a good scope for NPST’s technology.
Clara Industries Limited IPO
Clara Industries Limited is an Indian company that manufactures and supplies high-end multilayer plastic bags and rolls for various sectors, including FMCG, consumer products, pharmaceuticals, and more. The company has a wide product portfolio, a diversified customer base, and a semi-automated manufacturing unit located in Saharanpur, Uttar Pradesh.
In December 2021, the company went public through a fixed price issue IPO on BSE SME, offering 702,000 shares at a price of ₹43 per share, aggregating up to ₹3.02 Cr. The IPO opened on December 16, 2021, and closed on December 21, 2021. The lot size was 3000 shares.
DU Digital Technologies Limited IPO
DU Digital Technologies is a company that provides visa processing services to embassies of different countries, acting as a liaison between visa applicants and technical processing units. It offers various contractual and value-added services through Visa Application Centers in several cities in India.
The company went public through a Fixed Price Issue IPO in August 2021, with a lot size of 2,000 shares and a price of ₹65 per share, aggregating up to ₹4.49 crore. The IPO received negative reviews due to the company’s declining financial performance and high valuation.
EKI Energy Services Limited IPO
EKI Energy Services is a company that offers climate change, carbon credit, and sustainability solutions to various government and private sector clients. It started as a climate change advisory service but has expanded into carbon credit trading, business excellence advisory services, and electrical safety audits. The company has a strong and widespread clientele base, a qualified management team, and multiple business verticals.
The company was listed on BSE SME on April 7, 2021, and had a total issue size of 1,824,000 shares. The IPO had a lot size of 1,200 shares and was priced at ₹100 to ₹102 per share. The company’s financials show progressive growth in revenue and profit after tax. The IPO was well received by investors, and the company’s niche place in environmental services and carbon credit makes it a potentially lucrative investment for the medium to long term.
Promax Power Limited IPO
Promax Power Limited is a company engaged in the business of engineering procurement construction for electrification, civil infrastructure, and water infrastructure management projects. Its business segments include Transmission Lines, Power Transmission and distribution, substations, Solar Projects EPC, sewage treatment Plants, and Water Treatment plants. The company has a stable and experienced management team, good relationships with customers and suppliers, and ISO certifications.
Promax Power Limited had an IPO from September 30, 2021, to October 4, 2021, and was listed on BSE SME on October 12, 2021. The IPO consisted of 1,600,000 shares at a fixed price of ₹10 per share, aggregating up to ₹1.60 Cr. The lot size was 10,000 shares, and the retail portion was 50% of the total shares offered.
SME IPO trend in 2021
The SME IPO trend in 2021 was quite positive, with a significant increase in the number of IPOs launched compared to the previous year. As per data from the National Stock Exchange (NSE), there were a total of 48 SME IPOs launched in 2021, raising a cumulative amount of Rs. 2,176 crores. This is a significant increase from the 22 SME IPOs launched in 2020, which raised a cumulative amount of Rs. 315 crores.
The increase in SME IPO activity can be attributed to a few factors, such as a favorable market environment, increasing investor interest in the SME segment, and the government’s initiatives to support the growth of small and medium-sized enterprises. The listing of SMEs has become easier due to the introduction of the BSE SME and NSE Emerge platforms, which provide a cost-effective and streamlined process for SMEs to go public.
Effect of Pandemic on SME IPOs 2021
The COVID-19 pandemic has had a mixed impact on SME IPOs in 2021. On one hand, it has led to a surge in demand for digital services and products, which has benefited many small and medium-sized enterprises. This has resulted in several successful SME IPOs, particularly in the technology and e-commerce sectors. On the other hand, the pandemic has also led to a challenging economic environment, which has made it difficult for some SMEs to raise capital through IPOs.
Many investors have become cautious due to the uncertainty caused by the pandemic and are hesitant to invest in smaller companies. As a result, some SME IPOs have been postponed or canceled in 2021. The COVID-19 pandemic has created both opportunities and challenges for SME IPOs in 2021.
In conclusion, SME IPOs saw a surge in 2021 despite the challenges posed by the COVID-19 pandemic. The strong investor appetite, favorable market conditions, and government initiatives have contributed to this trend. However, the long-term impact of the pandemic on the SME sector remains to be seen. Going forward, SMEs need to maintain their financial resilience and transparency to continue to attract investor interest in the IPO market.