A top BSE official said on Wednesday that more than 60 small and medium enterprises (SMEs) are likely to tap the market in the next year to raise equity funds to cover their business requirements.

According to Ajay Thakur, head of BSE SME and Startup, these companies would be listed on the exchange's SME platform. Last year, only 16 SMEs collected Rs 100 crore through an initial public offering (IPO).

Thakur said the exchange is taking proactive initiatives to promote an equity culture among SMEs by hosting webinars and collaborating with state governments and other professional organisations. During the pandemic, the exchange held over 150 webinars to educate SMEs on the benefits of equity funding and listing, he said.

According to Thakur, a lack of understanding of listing has resulted in a lot of pre-conceived assumptions that listing entails higher compliance and expenditures. He believes that listing will assist SMEs in increasing their visibility and brand building, as well as improving their credit rating, providing easier financing, and expanding their growth options.

"BSE SME became the first SME platform where 400 prospectuses have been filed by SMEs. Of these, 337 have already listed and the remaining 63 will be listed in one year time because of the ongoing pandemic," Thakur said. Last year, too, because of the several steps taken by us, we saw one company got listed every month on the platform, he added.

The funds collected will go toward business expansion objectives, capital expenditures or working capital needs, and other general corporate reasons. IT, automotive components, pharma, infrastructure, and hospitality are just a few of the sectors represented.

According to Thakur, the BSE SME platform has proven to be the most cost-effective platform for small and midsize enterprises to raise funds and gain visibility over time.

In March 2012, the BSE introduced the SME platform to raise capital for expansion and growth.

Since then, 337 companies have been listed on the SME section, garnering a total of Rs 3,500 crore. The combined market capitalisation of these companies exceeds Rs 26,300 crore. 99 of the 337 companies have made the switch to the main board platform. Around 10-12 companies are listed on BSE startups platform, which was launched in December 2018, to allow funding for the deserving startups by enabling them to acquire capital from the market.