NSE, MoD sign MoU to faciliate market access to defence MSMEs

The National Stock Exchange and the Ministry of Defence signed a Memorandum of Understanding (MoU) to facilitate capital market access to the MSMEs in the defence sector via listing on the NSE Emerge platform.

“The MoU intends to facilitate MSMEs in the defence sector to raise productive capital for their growth plan efficiently and transparently through NSE platform ‘NSE Emerge’,” a statement says.

The MoU was signed between Anurag Bajpai, the Additional Secretary of the Department of Defence Production (DDP) and Ashish Chauhan, the Managing Director of NSE, in the presence of Defence Secretary Giridhar Aramane.

For the five years for which the MoU will remain in force, the DDP and the NSE plan to conduct extensive awareness drives through seminars, MSME camps, knowledge sessions, road shows and workshops to guide enterprises involved with the Defence Ministry to raising equity capital on NSE Emerge platform.

NSE Emerge is a marketplace for emerging corporates to raise capital from Institutional investors and HNIs. Launched in 2012, the platform enables small and medium enterprises to get listed on the exchange without making an initial public offering, which can then later migrate to the main board of the exchange. This provides a listing opportunity to the SMEs with minimum compliances and costs compared to the main board. As of May 31, 2024, with a market capitalisation of ₹1.45 lakh crore, 476 companies are listed on the exchange, which have raised a total capital of ₹10,702 crore so far.

The exchange said that it will assist the MSMEs in connecting with intermediaries such as merchant bankers, registrars, transfer agents, and depositories and guide them regarding the capital markets, capital raising mechanism, regulatory compliance and other requirements.

“This MoU will help MSMEs and emerging companies in the defence sector to scale up their business operations, explore new markets and fund their R&D activities,” the press release adds.

This move for MSMEs aligns with the government's larger objective of attaining 'Atmanirbharta' in defence production. In the recent Budget, the government increased the allocation for defence innovation through its iDEX ecosystem from ₹115 crore in FY 2023-24 to ₹518 crore for the current fiscal year, aiming to support start-ups, MSMEs, and innovators in developing Def-Tech solutions and engaging young talents.