mumbai power banks and utilities may have given more than 20 returns last year even though the sensex gained just over 4 now look at the returns given by an index which is lower in the pecking order than smallcaps and even microcaps nse sme emerge index which captures the vibrancy of small and medium enterprises smes on the bourse has surged a little over 69 in 2022 a similar trend is seen on the bse where its sme ipo index generated a 42 gain the eyepopping returns among sme stocks is a sign of increasing investor interest in these companies however such strong performance mostly pales in comparison to the overall investor interest that stocks listed on the main board of the exchanges attract consider this in middecember the ipo for droneacharya aerial innovations a bengalurubased sme was subscribed 262 times leading to a book size of a little over rs 6000 crore against this the combined demand size of two other main board ipos that had opened during the same time was about half of droneacharyasthe ipo for the bengalurubased drone specialist listed on the bse was not an outlier recently two more smes recorded huge subscription numbers phantom digital effects was subscribed 234 times while annapurna swadisht was subscribed 190 times both these companies are listed on the nses emerge platform according to santosh pandey president head professional clients group at nuvama formerly edelweiss broking there are at least two reasons for the strong investor interest for sme stocks now for one since last april funding limit for main board ipos have been restricted to rs 1 crore per person per offer this move has worked as a check on excessive rush for main board ipos and hence it has created a level playing field for all investors some investors are now looking at investing in sme ipos second most mid and smallcap stocks are fully valued while smes are attractively valued this in turn is attracting investor interestto the advantage of smes several highprofile main board listings in the last 15 months have destroyed huge investor wealth most of these ipos like lic paytm nykaa and some others were offers for sale ofss either partly or fully these ofss gave an exit to existing investors while smes ipos are aimed at raising growth capital hence investors cautious about investing in ipos on the main board are now looking for smes that are raising funds for further growth and are backed by good management said kulbhushan parashar director at corporate capital venture ccv parashar had led all the three sme ipos droneacharya aerial innovations phantom digital effects and annapurna swadisht that saw recordbreaking subscription numbersa listing helps promoters of these companies too an exchange official said once listed they get visibility they also get introduced to strict governance norms the official said over the last 10 years more than 200 companies that were initially listed on sme platforms of