SME-To-Mainboard Migrations Rise As Retail Interest Surges

India’s Small and Medium-Sized Enterprise (SME) exchange is witnessing a faster shift of companies to the main board, showing how quickly the smaller listings market has evolved in recent years. Between June 2025 and May 2026, as many as 23 SME-listed firms moved to the main exchange platform. In the previous year, the number stood at 13.

The pace is notable because several of these companies were listed only in 2021 and 2022. Earlier, SME firms often spent close to a decade before becoming eligible for migration. Now, many are making the transition in just three to four years as investor participation in smaller companies continues to rise.

The trend has also kept several SME counters active in the stock market, especially those linked to sectors such as renewable energy, defence, engineering, logistics and fintech.

Why Is Migration Activity Rising?

Market participants say the SME fundraising boom over the last few years has played a major role. Strong retail interest and easier access to capital allowed many businesses to expand faster than expected.

The movement to the main board also gives companies access to a wider investor base.

R.M. Drip & Sprinklers Systems experienced an increase in trading volume from about ₹1.95 crore before migration to about ₹24 crore after migration. The other firm, Krishna Defence & Allied Industries, saw its trading volume increase from about ₹9.1 crore to ₹22 crore.

Companies such as Insolation Energy, Jeena Sikho Lifecare and Solex Energy recorded improved trading activity as well.

While institutional investors and mutual funds, who generally shun SME boards because of liquidity constraints, find it easy to trade when migration occurs, there is no uniform pattern in terms of stock market performance following migration.

Does Migration Guarantee Better Performance?

In several cases, the excitement appeared to cool after the migration was completed. Knowledge Marine & Engineering Works saw trading volumes decline despite strong activity before the move. Similar trends were visible in Network People Services Technologies, Northern Spirits and Affordable Robotic & Automation.

Pranav Haldea, Managing Director of Prime Database, said migration should not be treated as a sign of automatic value creation.

“Companies with stronger fundamentals and institutional appeal tend to benefit more, while speculative stocks may already have priced in the gains earlier,” he said.

Haldea added that many SME stocks are witnessing a “buy the rumour, sell the news” phase, where investors rush in before migration announcements and exit later.

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Analysts believe the speed of migration matters less than business quality, governance standards and earnings consistency. Even so, with the SME IPO pipeline remaining active, more companies are expected to move to the main board over the coming years.

Source:

Moneycontrol