Even while on regulatory radar, BSE SME IPO index surge far outpaces all other benchmarks globally
2024-12-30
Category: None

Even as the SME IPO segment remained under the regulatory scanner in the recent past, the BSE SME IPO index surged significantly during the year and outpaced almost all the other benchmarks globally and domestically and even across asset classes including commodities like gold, silver and crude.
The BSE SME IPO index gained a huge 135 percent during 2024 and even overshadowed the gain in Bitcoin that grabbed many headlines in the recent past. The Bloomberg Bitcoin Index surged nearly 121 percent during the year.
Meanwhile, among global equity benchmarks, Nasdaq gained 31 percent while the S&P 500 rose 25 percent, and the Dow Jones advanced 14 percent during 2024.
In Europe, Germany’s DAX increased 13 percent, while the FTSE 100 gained 7 percent, and France’s CAC 40 declined 8 percent. In Asia, Hong Kong’s Hang Seng climbed 18.6 percent, the CSI 300 advanced 13 percent, and Japan’s Nikkei rose 7.5 percent.

While South Korea’s Kospi dropped 21 percent, and Indonesia’s Jakarta Composite Index declined 8 percent, some of the other but lesser-tracked markets like Pakistan and Sri Lanka registered notable gains of 80 percent and 62 percent, respectively.
In India, the S&P BSE Sensex and Nifty 50 recorded modest gains of 6 percent each, while the BSE MidCap and BSE SmallCap indices outperformed significantly, rising 23 percent and 26 percent, respectively.
In the commodities space, precious metals delivered mixed results though remained well below the BSE SME IPO index in terms of returns. Precious metals like gold and silver gained 27 percent and 19 percent, respectively while platinum and crude oil dipped 10 percent and 4 percent, respectively.
Analysts attribute the exceptional rally in the BSE SME IPO Index to strong retail participation, with several IPOs being oversubscribed in multiples of hundred times, reflecting robust investor appetite driven by abundant liquidity and a fear of missing out on potential gains.
A tightened regulatory framework has further enhanced governance and transparency, boosting investor confidence, they say while adding that stricter eligibility criteria have ensured that only well-managed SMEs access public markets, improving the overall quality of offerings.
They further highlight the fact that the surge in SME stocks is not isolated, as small-cap, micro-cap stocks, and cryptocurrencies have also rallied, signalling a resurgence in risk appetite among investors. They say that despite geopolitical tensions and restrained expectations of rate cuts by global central banks, market participants have maintained a strong appetite for risk, as reflected in the stellar performance of the BSE SME IPO Index and Bitcoin in 2024.
Looking ahead, Mukul Goyal, Co-Founder of Stratefix Consulting, forecasts sustained growth in the SME IPO segment in 2025. He says that more businesses are recognising the advantages of public funding, but stresses the importance of maintaining quality as interest surges.“Companies must prioritise sustainable growth and effective fund utilisation to deliver long-term value to investors,” says Goyal. The outlook for 2025 remains positive, provided both issuers and investors exercise discipline to navigate this evolving and dynamic market landscape, he added.