Estimation of Impact Cost – A Study of NSE Emerge Platform
Abstract: The trading activity and liquidity are important factors to achieve success of SMEs. VCs, Institutional Investors and high net worth investors’ participation will help in progress of exchanges. The retail participation is also play an important role in creation of liquidity in the market. The paper attempts understand the present liquidity position in the NSE merge platform and whether the impact cost is more when compared with NE main boards. Illiquid companies and platform will make the investors to lose the confidence. The study revealed that all the companies won’t trade on regular basis. Investors’ sentiments get affected due to this as they will not be able to sell or buy stocks immediately. The Average Impact Cost of NSE Emerge is 16.45%, which is very high and found to be highly illiquid platform.
Key Words: Impact Cost, Liquidity, NSE Emerge, SMEs.
INTRODUCTION:
EMERGE is a credible and efficient market place to bring about convergence of investors and emerging corporate in the country. It offers opportunities to investors to invest in emerging businesses with exciting growth plans, innovative business models and commitment towards good governance and investor interest. NSE launched its SME platform, EMERGE, in September 2012. Since its launch, there have been 66 listings on the EMERGE platform, of which two migrated to the main board. NSE has always attempted to build a trustworthy platform for SMEs that would help them raise capital from investors who are looking for investing early in promising companies. NSE believes that EMERGE has an important role to play in facilitating the raising of capital by SMEs. EMERGE is expected to attract more entrepreneurs and investors. The trading terminals of the main exchange, its risk management and surveillance systems, and the existing infrastructure are all available to the SME platform.