Determining Smes Ipos Post Listing Performance With Key Financials And Non-Financial Disclosures

Abstract

SMEs play significant role in the country’s socio economic growth. SMEs generally have capital requirements for the expansion and growth through capital expenditures. Indian SMEs are allowed to raise the capital through public offerings of securities and these SMEs have specifically designated platforms like BSE SME and NSE EMERGE to list their securities which are offered to public. Therefore this study is an attempt to inspect the relationship and effect of key financials and non-financial information on post listing performance of small medium enterprises (SMEs) public offerings. Secondary data is used to analyze the performance of Indian SMEs IPOs under this study. Data related to key-financials and non-financial disclosures are taken from SMEs IPOs draft red herring prospectus DRHP and red-herring prospectus RHPs. Data of SMEs stock prices, issue prices, offer prices and market indices are collected from BSE SME websites and NSE emerge websites according to the SMEs listing on their respective stock exchanges. Data of SMEs public offerings subscriptions are taken from basis of allotment documents SMEs IPOs. Based on secondary data analysis it is inferred that Key-financials and non-financial disclosures may be used to assess the value of post listing closing prices of SMEs public offerings up to great and significant extent for upcoming SME IPOs. These non-financial disclosures and key-financials would be mainly used to do the valuations of SMEs IPOs post listing prices after one month, three months, six months, nine months and one year which would be helpful in better decision making and valuations for SMEs stock investors in the secondary market. As the time gap from the listing day increase the determination capacity of valuation models for post listing prices come down this concludes that in the long run updated key-financials and non-financial disclosures information might be useful for better determination of post listing share prices for SMEs stock which have already listed for more than nine months on SME stock exchanges.