2014-03-06

Indian SMEs now have to compete with global players: Andhra Bank CMD

Andhra Bank Chairman and Managing Director CVR Rajendran said that small and medium enterprises (SMEs) were overleveraging debt.

Indian SMEs now have to compete with global players: Andhra Bank CMD

Andhra Bank Chairman and Managing Director CVR Rajendran said that small and medium enterprises (SMEs) were overleveraging debt.



“Debt and equity are complementary to each other. The availability of equity capital is more significant in the present globalised  world, as the Indian SMEs have to compete with global players and they are in need of capital at low cost,” he said while addressing a seminar on listing opportunities available for the SME sector.



According to him, the current working capital requirement of MSME is Rs 22 lakh crore. As they need huge funding for their greenfield and brownfield expansion, this will likely trigger higher listing on SME exchanges.



Debt funding has always been the preferred source of financing for the SMEs whereas the capital market offers an alternative long-term financing source. Though banks are dealing with the problem of stressed assets in corporate and SME sectors, the latter still offers room for further lending, according to him.



Listing of a company on a stock exchange gives better valuation and this would assist in fulfilling their financial requirements to execute their expansion plans, he said.



SMEs in India are characterised by low capitalisation and limited assets, geographical diversity and high mortality, and poor financial disclosure among other problems, according to him.

 

Last year, Securities and Exchange Board of India (Sebi) had issued detailed guidelines permitting listing of start-ups and SMEs on the institutional trading platform (ITP) of SME exchange. Through this new route, SMEs and start-up companies will not require to make a public offer of securities for getting listed on the stock markets. 



The MSME segment contributes 8% to the country's GDP and its share in the country's manufacturing output is 45%. According to industry estimates, MSME employment can grow at 12% over the next decade to reach nearly 140 million workforce by 2020, contributing around 20% of the country's GDP by then.

Related opportunities
  • Quick Service Restaurants
    Just Shawarma is a QSR chain started by four students..
    Locations looking for expansion Karnataka
    Establishment year 2014
    Franchising Launch Date 2016
    Investment size Rs. 10lakh - 20lakh
    Space required 200
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Bangalore Karnataka
  • Amritsar, the city of Golden Temple, is also the soul..
    Locations looking for expansion Punjab
    Establishment year 2000
    Franchising Launch Date 2023
    Investment size Rs. 2 Cr. - 5 Cr
    Space required 4000
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Amritsar Punjab
  • Fine Dine Restaurants
    AURANT MODELS FOR AN EXPERIENCED OR A FIRST TIME RESTAURATEUR..
    Locations looking for expansion Gujarat
    Establishment year 2022
    Franchising Launch Date 2023
    Investment size Rs. 1 Cr. - 2 Cr
    Space required 3000
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Daskroi Gujarat
  • Cosmetics & Beauty Product Stores
    RENÉE Cosmetics is an Indian makeup brand that's redefining beauty..
    Locations looking for expansion Gujarat
    Establishment year 2019
    Franchising Launch Date 2023
    Investment size Rs. 10lakh - 20lakh
    Space required 400
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Ahmedabad Gujarat
Insta-Subscribe to
The Franchising World
Magazine
tfw-80x109
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
email
mobile
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities

Free Advice - Ask Our Experts

pincode
;
ads ads ads ads