Centre of Excellence comes up to assist Indian SMEs in IPOs, JVs with foreign firms   

NEW DELHI: IFCI Limited, in collaboration with the Federation of Indian Micro and Small & Medium Enterprises (FISME) has established a ‘Centre of Excellence for Aspiring SMEs’ (CoE) which will provide value added strategic services to the larger SMEs in India. The Centre of Excellence was inaugurated on February 17, 2024 at an event held in New Delhi. The IFCI is India’s first Development Financial Institution (DFI) while FISME represents 740 MSME associations across India.

Dr. Vivek Joshi, Secretary, Department of Financial Services, Ministry of Finance, Dr. Bhushan Kumar Sinha, Joint Secretary, DFS, Ministry of Finance, Atul Kumar Goel, MD & CEO, Punjab National Bank, Swarup Kumar Saha, MD, Punjab & Sind Bank and S. K. Hota, Managing Director, NHB attended the event. Large number of MSMEs, officials from NSE and BSE, Merchant Bankers, and foreign delegates including Dong Hung Pak, Vice Chairman, Korean SME Association in India (KOSMA), and Ms. Chen Yu-Chi (Estela), Executive Director, Economy Division, Taiwan Economic and Cultural Centre (TECC) in India ere also present on the occasion.

At the outset, Rahul Bhave, DMD IFCI Limited welcomed the guests. Thereafter, Rakesh Chhabra, Vice President, FISME addressed the gathering and marked the launch of Centre of Excellence for Aspiring SMEs (CoE) as a pivotal point in the nation’s entrepreneurial journey. He emphasized the vital role of the MSME sector, contributing over one third to India’s GDP and being the second largest employer.

However, he noted that protectionist policies over the past decades have stifled the growth of MSMEs, turning them into ‘dwarfs.’ Chhabra outlined key issues impacting SMEs, particularly limited access to credit, and proposed alternative approaches to address this challenge, such as valuing track records and entrepreneurial spirit as equity contributions.

Chhabra called for review of banking policies that require SME borrowers to get BLR ratings by external Credit Rating Agencies (CRAs) and highlighted the need for banks to understand specific business dynamics to facilitate credit delivery. He further suggested that banks invest in SMEs to boost investor confidence. He stressed upon the importance of an effective grievance redressal system with pre-defined escalation ladder and quality audits. Chhabra concluded by proposing annual dialogues between banks and MSME associations facilitated by the Department of Financial Services (DFS), with CoE playing a key role in organizing such discussions.

Manoj Mittal, MD & CEO, IFCI Limited ran the audience through the conceptualization of the Centre of Excellence and the strategic role it would play in addressing key needs of the SME sector. To begin with CoE had chosen to work in 2 strategic areas viz. 1. making SMEs ready for IPOs, 2. Facilitating JVs with foreign firms

Dr. Vivek Joshi, Secretary, DFS acknowledged the important role that MSMEs played in the Indian economy. He also emphasized the Government’s commitment to supporting MSMEs and ensuring their resilience and growth. During the event Dr. Vivek Joshi released a Handbook on “Making Aspiring Small & Medium Enterprises Ready for External Equity”. The handbook details the positive impact that listing on exchanges has on the performance of SMEs and showcases real life examples. It introduces the reader to the listing process and key considerations of equity investors. He also highlighted the dual advantage of this partnership in the form of expertise that IFCI brought to the Center as a Project

Management Agency for Performance Linked Incentive (PLI) Schemes launched by the Government of India under the aegis of “Atmanirbhar Bharat and vast outreach of FISME.

During the event, Stock Holding Corporation of India, a subsidiary of IFCI, also released an impact report on its e-Stamping business. E-Stamping is a landmark initiative in the Indian economy which has several benefits such as enhanced security, real time processing, cost saving to the government and a positive environmental impact.

The Centre of Excellence entered into a Memorandum of Understanding (MoU) with Korean Small & Medium Enterprises Association in India (KOSMA), which represents the interests of South Korean MSMEs established in India. The parties agreed to explore the potential for collaboration by way of establishing joint ventures between SMEs of India and South Korea and facilitating the exchange of knowledge, expertise, and technology between SMEs of both countries.

A panel discussion on the topic “SME Capital Markets Momentum – Broadening the base and reaching new heights” was also organized during the event. The panel comprised experts from NSE, BSE, NBFC sector, the CEO of Share India and a delegate from the SME sector. The event concluded with a vote of thanks by Sachikant Mishra, Executive Director, IFCI Ltd.

About IFCI Limited

IFCI Ltd. was established on July 1, 1948 as India’s first Development Financial Institution (DFI). Since then, IFCI has contributed significantly to the economy by funding projects and corporate entities across industries and sectors. Over the years, IFCI played a pivotal role in establishment of various important institutions. Presently, IFCI is an NBFC-NDSI. It is also actively engaged in providing a wide gamut of advisory services and is engaged as Project Management Agency for 10 of the 14 PLI Schemes launched by the Government of India as also for various Capital Subsidy Schemes.

About Federation of Indian Micro and Small & Medium Enterprises (FISME)

FISME came into being in 1995 as a Federation of geographical and sectoral associations of Small and Medium Enterprises (SMEs) in India spread across districts and states. FISME focuses primarily on trade and market access issues and reforms with the twin objective of establishing entrepreneurial and competitive environment at home and greater market access for Indian SMEs in India and abroad. Presently, around 740 Associations are its members. As a leading Federation of MSMEs, FISME is fully aware of challenges faced by MSMEs in accessing external equity. FISME is ISO 9001 “2008” certified organisation and has been complying accreditation standards for Business Membership Organisations. It was awarded Gold Grade at national level by Quality Council of India.