The BSE SME Exchange is here

The month of March 2012 witnessed a remarkable moment for the Small & Medium Enterprises (SMEs) with the launch of an exclusive Stock Exchange, supported by the Bombay Stock Exchange (BSE). The much discussed project was initiated by the BSE and NSE to offer an alternative stage for SMEs to raise capital for their growth and progress. The BSE SME exchange shares a common platform and infrastructure with the BSE whereas the NSE launched its version ‘Emerge’ with an online version.

More freedom for SMEs
The SME Exchange marks a new beginning for all small and medium-sized businesses in India which were introduced to this concept in the past one year. It is believed that Indian SMEs lack information regarding equity capital, stock market and funding options besides banks. Their dependence on banks and private lenders can now be easily replaced by this new initiative. The SME Exchange is expected to provide equity financing which can lower the debt burden of the listed companies, resulting in lower financing expenditures and a healthier balance sheet. This can help SMEs in developing their business from expansion to acquisition. Another important contributing factor is the visibility of the company which would be boosted by such an exchange and offer them access to the capital market. It also prepares the SMEs to grow and break into the bigger exchanges. Start-up issues related to many SMEs can also be solved by the presence of an exchange.

The Exchange and its operation
Various exchanges such as AIM (London), TSXV (Canada), GEM (Hong Kong), KOSDAQ (Korea) and NASDAQ (USA) were observed and studied to adapt their salient features and best practices. The SME Exchange would involve a minimum of 50 investors and Rs 50 lac post-initial public offer (IPO) paid-up capital. Listing would be compulsory for companies which have Rs 50 lac to Rs 10 crores and companies which have a paid-up capital between Rs 10 crores and Rs 25 crores have an option to list either on the SME Exchange or the main exchange.

Welcomed with open arms
The Exchange has received an encouraging support from various segments of the industry including manufacturing, textiles, IT, agro-based enterprises, and construction, among others. Even merchant bankers have expressed their interest in the initiative. Focus is on encouraging investments from small industrial towns and cities such as Dehradun, Jamshedpur and Haridwar, for raising capital from the SME Exchange. Tier-II and Tier-III cities are expected to be a big market for the SME Exchange.

New beginnings
The listing of BCB Finance marked the start of the BSE SME Exchange. Six SMEs have been already approved to enter the capital market and seven more are expected to follow suit. The target is to include about 10 by the end of the fiscal year and then extend up to 100 in the coming 18 months. An estimate puts the number of SMEs at a whopping 30 million, out of which about one million have a potential to be listed on the SME Exchange.

Expert Speak: Mr. GK Pramod

Business Growth & its Relevance for SMES

As a Small and Medium Enterprise (SMEs), we all talk, dream and think about business growth to achieve higher goals in life. But it is as imperative to understand the meaning and relevance of business growth.

We all have our own definitions and meaning of business growth for our company depending upon the business requirements or the success achieved so far or may be the failures from which they have learnt. The sphere of business growth might include increase in turnover, heavy investments, hiring more people, et al, but this is not all. Business growth has a broader spectrum in terms of achievement which a company aims for.

Let us understand the concept with an example so that we may be able to define the business growth strategies for our respective companies.

Ramesh Patil’s Case Study (Service Business):

Mr. Ramesh Patil is a Microlevel Entrepreneur from Belgaum in Karnataka. He is running a Photography and Videography business. The details of Ramesh Patil’s business organization unit are as follows:

1) Name of the entrepreneur:                 Mr. Ramesh Patil

2) Name of the organization:                  OM Shiva Videos

3) Nature of business:                            Photography & Videography

4) Details of turnover for the past 3 years:

 

According to Mr. Patil, the definition of Business Growth would envelopes:

a) Growing the business

b) Increasing the turnover

c) Investing in buying new digital cameras

d) Hiring more people

But if we see Mr. Ramesh Patil’s case, he is only considering very few points related to Business Growth leaving the other vital parameters regarding Business Growth which are mentioned below:

a) Increasing profitability

b) Increasing market share

c) Opening more business outlets

d) Pumping more finances in to the business

e) Diversifying into advertising, publishing, editing and other business areas

Dear Microlevel Entrepreneurs, let us combine and analyse all the points related to Mr. Ramesh Patil’s Business Growth of his Photography and Videography business.

Importance of Business Growth:

a) A Microlevel Entrepreneur gets motivated by Business Growth

b) Business Growth helps in increasing in turnover there by profitability

c) Increasing the customer base

d) Increase market share and market size

e) This helps the Microlevel Entrepreneur to move from Microlevel to Macro level

Key Points to Remember:

a) Prioritize Business Growth Strategy
b) Give importance to existing business and simultaneously sensibly plan for the product/service diversification in the near future

While we have discussed Business Growth in this blog, we will continue in the next blog with the must practice three ‘SUTRAS’ that makes the business growth strategies more effective. Hope the blog has been insightful.

The blog has been authored by Mr. GK Pramod, Co-founder, The Second Gear - MBA for Non MBA's Mentoring Module Concept.


To contact the author, e-mail at gk@tothesecondgear.com

Kindly leave your comments and queries.

Israeli Startup Changes the Way Customers Order Food in Restaurants

Innovation is the name of the game and who better than start-ups to lead the charge. Small and Emerging businesses are the one's which innovate across to create new offerings to solve many customer oriented challenges. The one advantage that SMEs have over many of their larger counterparts is that they have the open-ness and ability to think across many different directions to reach to a solution of a problem. Such innovations have in the recent times changed the way people engage and are slowly introducing an evolved form of interactivity in human emotion.

E-Menu the future of restaurant technology
One such Israeli startup has developed a technology which not only helps restaurants save cost on human resources, but also helps them keep the customers engaged with engaging games and participative ways of ordering food. The video below explains how:

How is this technology changing the game?

The very first thing by eliminating the whole concept of having waiters to serve at the restaurant. The touch screen technology also creates a whole new engagement level which the customer can interact with, while ordering food. You can present the customer with more elaborate information about the food they are ordering, hence empowering them to take an informed decision about what they are consuming. Also these screen can be used as engaged advertising mediums.

What is the simplest way you can experience this?

While many customers are using touch screen interactive devices like the iPhone and the iPAD, they are obviously touching information and consuming it in a manner which was not possible before. You can simply create such information and do a proof of concept with your target customers. Mobility is giving a new edge to businesses to help them reach out to their customers in a more personalized and engaging manner.

Team IndiaMART Knowledge Services is committed to create new opportunities or SMEs to grow. To know more about how you can leverage the internet and new media technologies, drop in a comment to this post and our team of experts will be happy to help!