After the huge success of the two day UP Investors summit 2018, the Yogi Adityanath government has focused its attention on creating an ecosystem for arranging the finance for the Start Ups and Medium small and medium enterprise. The government prefers to act as an enabler for the MSME to access to the capital market. MOUs of Rs 4.28 lakh crore were signed during the two day summit which concluded on February 22.
The state government has signed a Memorandum of Understanding with the National Stock Exchange (NSE) for enhancing financing opportunities for SMEs by listing on NSE’s SME platform, `NSE Emerge’
EMERGE is a credible and efficient market place to bring about convergence of sophisticated investors and emerging corporate in the country. It offers opportunities to the investors to invest in emerging businesses, innovative business models and commitment towards good governance and investor interest.
As per the MoU signed by the NSE, the exchange would nurture UP start-ups and SMEs by creating awareness about the opportunities to raising capital, SME exchange guidelines, listing processes, compliances with listing agreement etc. The start-ups seeking the state government help in this regard would be mentored by NSE regarding the capital markets, capital raising mechanism and regulatory compliances.
Besides, the state would explore the possibility of providing one-time financial assistance/subsidy to SMEs for the cost of public issue expenses subject to a ceiling to be determined from time to time. Besides, the government would explore the possibility of setting up a government-sponsored SME equity participation fund in partnership with PSU banks.
The UP SMEs would be enrolled in NSE’s Capital Markets Program comprising physical and virtual participation in the scheme. A senior official of the industries department said “NSE and the state government have agreed on the importance of the development of SME sector and improving the financing opportunities by listing on NSE Emerge,”
The state has flourishing handicraft and handloom industries, leather industry, tourism industry and agro-industry etc. We are confident that the MoU would facilitate the SMEs meet their funding needs by listing,” state MSME & export promotion principal secretary Anil Kumar said.
Official sources said the MSME in UP are traditionally privately owned entities and are not used to the practice of accessing the capital market for their requirement of funds. However, in recent times there has been interest among these concerns to list on the stock exchange and brace up for future challenges brought about by globalisation and opening of the domestic markets.
UP has a large MSME base estimated at over 50 lakh contributing 60 per cent to its annual industrial output. The sector directly employs about 4 crore people, generating direct economic activity worth almost Rs 1.5 lakh crore annually. The sector is the second largest employment generator after agriculture. Currently, NSE’s SME EMERGE platform has 123 companies, including 3 entities from UP.