Rajasthan Global Securities Pvt. Ltd. Becomes First in India to Anchor 100 SME IPOs

Rajasthan Global: Pioneering Institutional Trust in India's SME Platform

SMEs: Driving the Growth Engine of India's Economy

Small and Medium Enterprises (SMEs) are the lifeblood of the Indian economy. They contribute nearly 30% to India's GDP, generate over 45% of the country's exports, and provide employment to more than 110 million people, playing a pivotal role in inclusive growth, rural industrialization, and innovation.

Despite their critical contribution to India's economic and social fabric, SMEs have traditionally faced challenges in accessing capital, particularly through capital markets. The SME Exchange, conceptualized as a platform to bridge this funding gap, has grown steadily over the past decade-but truly transformational change began only after COVID-19.

Pre-COVID Landscape: Limited Access, Limited Confidence

Prior to the COVID-19 pandemic, the SME IPO segment was under-penetrated and largely dominated by fixed-price issues with minimal institutional participation. In 2020, only 20 SME IPOs were listed-a reflection of the caution prevalent amongst merchant bankers and investors. The book-building route was rarely used due to the absence of Qualified Institutional Buyers (QIBs) willing to anchor issues and commit large amount of capital by absorbing big blocks of confirmed allotment of stocks that through under lock-in.

The reluctance of institutional investors created a significant vacuum in terms of credibility and scalability for SME listings. Many merchant bankers remained hesitant to pursue the book-building route for SME IPOs, primarily due to concerns over insufficient anchor investor interest and the potential for under-subscription. At that time, the concept of anchor investment on the SME platform was still in its infancy and lacked broader acceptance. Furthermore, the regulatory lock-in requirements added to the disincentive-50% of the anchor allotment was subject to a one-month lock-in, while the remaining 50% is locked in for three months. This lock-in requirement further discouraged potential anchor investors, many of whom were already wary of limited liquidity and constrained exit opportunities-particularly in a market that was still at a nascent stage of development and lacked depth.

Post-COVID Revival: A Surge in Participation and Optimism

In 2021, a post-COVID recovery in capital markets ignited renewed interest in the SME segment. A total of 59 companies listed on SME exchanges that year-nearly triple the number from the previous year indicating a paradigm shift. Retail and High Net-worth Individuals (HNIs) participation surged, and the market began noticing SMEs with scalable models, strong management, and niche propositions.

However, merchant bankers continued to grapple with a critical challenge: lack of anchor/QIB participation in SME IPOs filed under book-building. This made institutional validation-the backbone of mainboard IPOs-largely absent in SME capital formation.

Rajasthan Global Securities Private Limited: A Visionary First-Mover

Amidst this transition, Rajasthan Global Securities Pvt. Ltd. (RGSPL) emerged as a pioneering institutional force. A Delhi-based Non-Banking Financial Company (NBFC) with a strategic focus on structured lending and equity investments, RGSPL recognized the untapped potential in the SME capital market and stepped in as one of the earliest Qualified Institutional Buyers (QIBs) to actively participate in SME IPOs through the book-building mechanism. At a time when most institutional investors remained cautious, RGSPL led the way by committing capital and confidence, thereby catalyzing a shift in how SME issues were structured and received.

This vision has culminated in a historic milestone-RGSPL has officially anchored its 100th SME IPO with the investment in Shri Hare-Krishna Sponge Iron Limited, a landmark that not only reinforces its leadership in the segment but also reflects the evolving maturity and credibility of India's SME capital market.

By doing so, RGSPL not only catalyzed confidence in the ecosystem but also set a benchmark for other institutional investors. It anchored IPOs even when the broader institutional market was still skeptical-providing merchant bankers with the confidence to structure robust offerings and setting in motion a new era of SME investing.

Leadership: The firm is led by Mr. Lalit Dua, a financial markets veteran with over 31 years of experience across equity, investment banking, private equity, and strategic advisory. Under his guidance, RGSPL has become a robust and diversified NBFC with a sharp focus on identifying scalable businesses at early stages.

Financial Highlights - FY 2024

• Net Worth: ₹2,527 Crores
• Profit Before Tax (PBT): ₹849 Crores
• Profit After Tax (PAT): ₹689 Crores
• 9M FY25 PAT: ₹535 Crores

Despite having the largest anchor investment base in the SME segment, RGSPL has maintained a highly selective and disciplined approach to its investment strategy. This prudence is underscored by its industry-low average Price-to-Earnings (P/E) ratio of 14.23 amongst all anchor investors with more than 22 SME IPO participations. Notably, RGSPL also holds the distinction of achieving the highest average current gains from offer price till date across the SME space, outperforming all anchor investors with over 25 IPO investments. This strategic, data-backed approach has positioned RGSPL as a benchmark in delivering consistent and superior returns within the SME anchor investment ecosystem.

Conclusion: Shaping the Future of SME Investing

The achievement of RGSPL in becoming the first and leading anchor investor in 100 SME IPOs is not merely a financial milestone-it is a testament to vision, conviction, and catalytic leadership. By stepping in when confidence was scarce and anchoring growth when it mattered most, RGSPL has helped transform the SME IPO ecosystem into a more vibrant, liquid, and institutionally credible platform.

We at Chittorgarh.com wholeheartedly congratulate the team at Rajasthan Global Securities Pvt. Ltd. for this historic accomplishment and their unparalleled contribution to India's capital market evolution. Their journey showcases how visionary institutional capital can empower the SME backbone of India, fueling innovation, employment, and inclusive economic growth.

Credits

• Data compiled from (Chittorgarh.com IPO Anchor Investors Report)
• Financials sourced from Acquite Ratings & Research Limited (Feb 10, 2025) (Acuite.in)
• Acknowledgment to Mr. Ajay Thakur's book: "Vision to Victory - Unleashing India's SME Platform".