Small Diamonds Generate Huge Returns in SME IPOs in FY23


SME IPOs are gaining investors’ attention for the past couple of years, and the trend only continues to increase. The Finacial Year 2023 has seen a surge in SME IPOs that gave investors double-digit returns or even more, up to 463%, as reported by a data pulled from PRIME Database. Varanium Cloud, a Mumbai based digital technology company lead this surge with a staggering 463% return since its Dalal Street debut in September-end, followed by Jay Jalaram Technologies, which multiplied 5 times in 6 months, and other notable companies such as Containe Tech, Upsurge Seeds of Agriculture, Globesecure Tech, Concord Control and Droneacharya, which also saw stunning returns.

Hem Securities’ directors Gaurav and Prateek Jain emphasized on positive investor’s demand in SME IPOs as well as the companies’ increasing balance sheets, both of which have collectively earned better returns for such investors who betted on SME IPOs.

Various factors can contribute to the success of SME IPOs, including the companies’ strong business model, operations in niche and attractive business segments, commitment from promoters, valuation, etc. As reported by Kulbhushan Parashar, Founder and Managing Director of Corporate Capital Venture, Indian SME segment has become a very attractive Silicon Valley for start-ups. Experienced and smart investors are more likely to place bets on new edge companies, seeking excellent returns.

Despite the appealing returns seen in FY23’s SME IPOs, there is still a risk of financial losses involved. Notable losing companies include Pace E-Commerce Ventures, Rhetan TMT, Ishan International, Silver Pearl Hospitality and Mafia Trends. Uday Nair of Fedex Securities suggests that new investors should be careful when making high risk-high-reward bets and should avoid investing in SME stocks.

Overall, SME IPOs offer great potential rewards and could be worth the risk of investing in. However, investors should research these IPOs thoroughly before making any decisions.