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Our journey to an SME IPO

Our journey to an SME IPO

Business Development

Manish Dutt

Manish Dutt

16 Apr 2019, 15:13 — 5 min read

I have always believed that to grow your business you require perseverance, strategic planning and the ability to seize opportunities, or rather the knack to create opportunities!

Our firm VR Films & Studios was founded in the year 2000 and we specialise in film distribution and dubbing. Recently, a major opportunity that we have created for our business is to go public. We have listed our business on BSE SME IPO (Initial Public Offering). 25% of our shares are now listed on the stock exchange for trading. I believe that unlocking our shares opens huge avenues for us. The process has been far from easy and there were naysayers along the way who said we were too small an entity to take this bold step. But I was convinced that this was the path for our business growth, here is why.

Rationale
If you want your business to grow by leaps and bounds, you need public participation and that kind of investment to come in. There is no better way other than to get listed, have the public as your partners and then grow. This is the basic reason to get listed and having an IPO.

With a bank you get investment with 15-18% interest, which is a major share of profit margin. The capital that you raise through an IPO is interest-free and that comes in as your profit. So, this makes much more sense.

I think its very important for business owners to grow in their mindset, how they perceive themselves. Mere existence is not enough, the commitment to grow should drive our actions.

 

What stage to list business?
There are differing opinions on the ideal time to list your business. The general opinion was that our business was too small, we should grow further and then get into IPO. Others suggested that we get an equity partner. The more people you ask, the more suggestions keep pouring in.

Even though we are relatively small, we are confident of our work. I was convinced that listing our business will be the key to our growth. I don’t mind diluting 25% of our equity which is the basic norm to get listed. Afterall, I have partners worth 25% in the company who would be coming in with the IPO.

Process
There are not many who are willing to help a small company go public. The effort to list your business is the same if you are 1000 crore firm or a 10 crore firm. But an SME platform has been created for small business owners to list their business. The process to list your business does take a very long time. The compliances are many. It really demands a lot from you, but it’s a one-time effort. The advantage is that it sets your entire business in order. If there are any discrepancies, this is your chance to correct them. It compels you to streamline.

Change in perception
Because of the stringent compliances that you go through, when you successfully list your business, the attitude of people also changes towards you. There is absolute transparency and greater legitimacy to your business. If I am not a listed company and if I say, ‘I am worth so much’ — it’s my word against yours. I have nothing to back my claim. But now as a listed company, it’s straightforward – this is the cost of my shares and these are the number of my shares. There is nobody who can dispute it, because it’s all governed by the SEBI board.

The road ahead
Today I am on the BSE SME. But if my shareholdings grow in the next two years, I can get listed on the BSE-NSE board, the main stock exchange. Otherwise to get on the national stock exchange is difficult. So, this is the stepping stone towards that. I am committed to ensuring that the public, my investors grow with me. This motivates me to work even harder.

I think its very important for business owners to grow in their mindset, how they perceive themselves. Mere existence is not enough, the commitment to grow should drive our actions.

 
To explore business opportunities, link with me by clicking on the 'Connect' button on my eBiz Card.

 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker. 

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Manish Kumar Dutt

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