SME IPOs listing is suitable for Companies with low turnover, less capitalization but the potential for high growth in near future. Upcoming companies, startups, e-commerce, technology companies, infrastructure, developers, agro focused companies are few of them.
Benefits of getting listed in the Stock Market
Reduction of debt burden
Fund-raising for Capital expenditure, expansion, new projects, M&A etc from Public.
Raise funds for activities such as marketing, research where debt is not available.
Liquidity to investors/share-holders without affecting the stability of the company
Listed companies generally find that the market perception of their financial and business strength is enhanced.
IPO listing is also a great solution for companies struggling with succession planning and that have difficulty in getting acquired by another company. IPO listing also helps Companies to convert paper currency in currency. It can help to issue ESOPs and retain talent.
Tax Benefits of getting listed in the Stock Market
The sale of unlisted shares in short-term attract the capital gain tax up to 30% as applicable to the taxpayer and the long-term capital gain tax of 10% without indexation and 20% with indexation.
The sale of listed securities in the short term attract the capital gain tax of 15% and there is no long-term capital gains tax provided it has been subject to Share Securities Transaction Tax. This makes it clear that the listing of shares is a very attractive option for SMEs.