DSE’s SME exchange is worthy of applause, but they have to avoid becoming OTCEI
While getting funds is the problem for SMEs, the biggest road block for VCs and PEs in funding SMEs is lack of appropriate exit routes. And that is what the new exchange should provide. Avers K. G. Alai, Chief General Manager, SIDBI, “The entry norms should be relaxed with low listing and maintenance cost, and of course, investors interest must be safeguarded. Further, it must be ensured that the market has requisite liquidity.”
Certainly, if investors find it tough to dispose their holdings, that will be the biggest repulsive factor for them. And lack of investors will straight away bring the new SME exchange at par with OTCEI. That’s not all. Warns Vijay Chandok, Global Head – SME, ICICI Bank Ltd., “Like all cricketers on Indian streets do not get a place in Indian team, not all SMEs are worth listing.” For this the exchange need to check the quality of issuers to keep investors safe, and that necessarily means that the pool of SMEs DSE is looking at will shrink by a good margin.
Before opening up the exchange on October 2, 2009 (as planned) DSE must look into the fact that if AIM is successful today, then LSE’s direct support to the exchange has a bigger role to play in that. Though, MCX’s recently launched stock exchange MCXSX is a partner in this venture, considering their limited experience in the arena, DSE will need an active support from the bigger brothers, NSE and BSE. After all, it’s an opportunity that, if grabbed properly, can bring windfall gains for all and sundry.
While getting funds is the problem for SMEs, the biggest road block for VCs and PEs in funding SMEs is lack of appropriate exit routes. And that is what the new exchange should provide. Avers K. G. Alai, Chief General Manager, SIDBI, “The entry norms should be relaxed with low listing and maintenance cost, and of course, investors interest must be safeguarded. Further, it must be ensured that the market has requisite liquidity.”
Certainly, if investors find it tough to dispose their holdings, that will be the biggest repulsive factor for them. And lack of investors will straight away bring the new SME exchange at par with OTCEI. That’s not all. Warns Vijay Chandok, Global Head – SME, ICICI Bank Ltd., “Like all cricketers on Indian streets do not get a place in Indian team, not all SMEs are worth listing.” For this the exchange need to check the quality of issuers to keep investors safe, and that necessarily means that the pool of SMEs DSE is looking at will shrink by a good margin.
Before opening up the exchange on October 2, 2009 (as planned) DSE must look into the fact that if AIM is successful today, then LSE’s direct support to the exchange has a bigger role to play in that. Though, MCX’s recently launched stock exchange MCXSX is a partner in this venture, considering their limited experience in the arena, DSE will need an active support from the bigger brothers, NSE and BSE. After all, it’s an opportunity that, if grabbed properly, can bring windfall gains for all and sundry.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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