For developing economies, integration into the global economy through liberalization, deregulation, and democratization is considered as the best solution to reduce poverty and uneven wealth distribution. Crucial to this process is the development of a dynamic private sector, in which SMEs play a major role. SMEs make up over 90 per cent of businesses globally and responsible for between 50 and 60 per cent of job creation. However, their significance in the development process goes beyond their strength in number. Number of researches has been done on the development contribution of small enterprises. In present scenario, the small and medium enterprises have is considered as the mechanism of growth for stimulating industrial development. While this sector has shown development however inefficiency to procure adequate funds from banks for growth, high cost of capital, insufficiency of raw material, lack of training and entrepreneurial skills development, unavailability oftechnical assistance, manifold laws and lack of professional management have been some of the major problems faced by the SMEs.SME listing has been allowed in some other countries like the AIM of London, the TSXV of Canada, the GEM of Hong Kong, the Mothers of Japan and the Kosdaq of Korea, However in India, this sector was not granted to have straight access to public funding through capital markets till 2012. However now the scenario has changed, SMEs are granted to raise funds in the capital market through SME stock exchange platform (BSE & NSE). Equity shares of small and medium enterprises are now allowed to be listed on SME exchange. The listing of SMEs will give this sector a direct financing platform for raising funds, nurturing expansion, help them in realizing its objectives and will also lead to equal distribution of wealth and economic growth. However, there is a need to identify that whether these SMEs have made a proper use of this platform, this is worthy of discussion and study. In this platform, this paper attempts to analyze the impact of SME stock exchange listing on their performance by using data from the annual reports of SMEs listed on BSE and NSE SME Exchange. The analysis revealed that there has been a significant impact of SMEs listing on the financial performance of the SMEs.
Small and Medium Enterprises, Financial Performance, BSE, NSE
