We conducted a poll amongst business leaders from the SMEs segment in India to find out the contemporary trends and pressing issues in the SME Industry. Here’s a summary from their responses.
Which services are required to scale up your business?
Surprisingly, over 35% of the participants currently cannot assess the scalability of their business. In line with the current slowdown, it is clear from the responses that capex cycle is subdued along with low capacity utilization levels. In light of these circumstances, businesses have not assessed their expansion plans in the near term. Financing however was seen equally important for scaling of operations but the emphasis will be lower borrowing cost. R&D and Skill remains a low focus area for the respondents.
Other source of investments to foray in public markets?
Again, majority of the respondents are not looking for any finances and the demand for other sources of financing remains low. Nearly 20% of the respondents indicated some interest in Private Equity while less than 10% showed some interest in Debt and Equity. A higher preference for PE is probably because of the perceived higher entry barriers in the Debt/ Equity markets.
What are the hurdles in listing in BSE?
Most respondent believe that they currently have no experience in raising money through the equity markets. Also, a significant 15% believe that they do not have the requisite knowledge to list themselves on the exchange as they are not sure about the repercussions. Availability of data was cited as the least important concern for considering a listing.
Whether listing on BSE will help to grow?
Despite citing lack of knowledge and experience, a majority of the respondents believe that a listing will help their cause. Even among the naysayers, the majority was limited by knowledge rather than actually negating a future listing completely.
Regarding GST, what is the support expected by SMEs?
As much as 43% respondents believe that training will help them deal with the new tax regime effectively. Further, 20% wanted more clarity on the guidelines and compliance costs involved. Less than 5% wanted a deadline extension while 18% sought no help in this regard.
Specific concerns pertaining to GST/Level of preparedness
Less than 5% respondents indicated that they are fully prepared to meet the GST obligations while nearly 13% out rightly suggested that they are not prepared at all. 35% and 25% of the respondents believe that Clarity on the processes and Compliance respectively are their chief concerns. Infrastructure issues were surprisingly the least concern for the respondents, when it comes to GST and its implementation.