Factor Analysis of Perceived Challenges for Listing on SME Platforms: A Study of SMEs in Gujarat State

SMEs play a crucial role in any country’s economic development. 90% of firms in India are SMEs. Availing financing is one of the critical issues with respect to growth and sustainability of SMEs. Their personal savings, friends and family, banks, NBFCs, venture capital, private equity, angel investors and public equity are just a few of the numerous ways they exercise to fund their business requirements. Public equity is a significant source of funding for all business enterprises. Many countries have created frameworks for SMEs to list on exchanges and obtain debt-free funding as well as alternative investment markets or SME platforms. As listing on exchanges is one of the mainstay options, it is essential to understand what challenges do SMEs face while thinking of listing. Perceived challenges while listing on SME platforms were examined in the current study. A total of 132 SMEs were contacted in order to gather primary data through structured questionnaire. Factor analysis and descriptive analysis were carried out to identify leading challenges with respect to listing on SME platforms. BSE SME is more known to respondents compared to NSE Emerge. Less than 16% SMEs have mindset to get listed on SME platform. The factor analysis revealed six main challenges: Compliance Intensity, Funded Scale and External Control, Structure and Stability, Strategic Ownership Defense and Longevity, Regulatory Conformity for Brand Growth and Perceived Complexity in Decision Making.