NSE CEO Ashish Chauhan Urges Startups, SMEs To Use IPOs For Growth

National Stock Exchange Managing Director and CEO Ashish Chauhan on Friday urged startups and micro, small and medium enterprises (MSMEs) to view public listing as a strategic mechanism for raising capital, strengthening governance, and scaling their businesses over time.

Speaking at the JITO Incubation and Innovation Foundation’s Foundation Day event held at the NSE, Chauhan advised founders to focus on building profitable and sustainable businesses rather than getting distracted by short-term fluctuations in share prices.

He emphasised that the stock market should not be mistaken for the business itself but rather seen as a reflection of underlying operational performance.

“Your business is in your operations, not in the share price. The stock market is only a reflection of your business, it is not the business itself,” he said.

Chauhan explained that listing on public markets allows promoters to access growth capital while still retaining control of their companies.

He noted that a promoter can initially offer around 25% equity to the public and continue holding the remaining 75%, with the flexibility to dilute further as the company expands.

“When you list, you keep 75% with yourself and offer 25% to the market in the beginning. You can give more later. Control stays with you,” he said.

He added that being a listed company enhances credibility, improves access to bank financing, attracts analyst coverage, and helps in hiring talent through stock-based compensation.

Additionally, listed equity can be used as currency for acquisitions or strategic partnerships.

Chauhan said profitable companies tend to command stronger valuations in the public markets.

He illustrated that a business generating ₹2 crore in annual profit could potentially achieve a market capitalisation of ₹40–50 crore after listing.

His remarks come shortly after NSE filed its draft prospectus for its long-awaited initial public offering (IPO).

Addressing concerns about hostile takeovers, he clarified that promoters retain control and ownership cannot be changed without their consent.

On SME liquidity concerns, he said trading volumes are supported by the market maker mechanism, which ensures two-way quotes for three years.

He also highlighted that NSE’s SME platform, launched in 2012, has enabled companies to raise over ₹21,700 crore collectively, with a combined market capitalisation exceeding ₹2 lakh crore.

While acknowledging higher risks in SME businesses, he said investors understand the risk-reward balance.

“If you are doing a business of ₹10 crore or ₹20 crore, you should be planning for ₹200 crore and beyond,” he said.

JIIF chairman Jeenendra Bhandari added that the foundation has completed four incubation cohorts in two years and facilitated over ₹60 crore in startup investments.