India’s two stock exchange platforms for small and medium enterprises at the National and Bombay stock exchanges, NSE Emerge and BSE SME, respectively, are proving a big hit with hoteliers looking to raise capital.
The hotel industry is not considered a major real-estate asset class in the country, although it is maturing with every year.
Nandivardhan Jain, managing director and CEO at Noesis Capital Advisors, said the main reason for this is capital efficiency and stage-appropriate funding.
“Many hotel companies in India are growing well but are still mid-sized. They need capital to expand, but they are not yet ready for the scale, scrutiny and cost of a main board [initial public offering],” he said.
Gajendra Singh Rathore, managing director at Jungle Camps India, said for first-generation entrepreneurs, the relatively new initiatives are wonderful platforms.
“We want to do good work, and this is a very good avenue to access funds,” he said.
Ramesh Shiva, chairman and managing director at Grand Continent Hotels, said Grand Continent decided to list on the SME platform to "access growth capital in an efficient and structured manner."
“Funds raised are being utilized to expand the hotel portfolio, strengthen the balance sheet and enhance operational capabilities, while also establishing a public market presence with strong governance standards," he said.
In 2025, the two SME platforms raised more than 90 billion Indian rupees ($953 million).
Sources said the portion of that capital attributed to hotels is not clear, but there have been more than a dozen hotel-company stock issues that have proved to have been successful.
Jain said the costs and compliance levels for listing on these platforms are "significantly lower."
“The SME platform is designed for companies that are still building scale. The compliance requirements, capital size and investor expectations are aligned with emerging businesses, unlike the main [stock exchange that] expects maturity and institutional depth," he said. “Hospitality companies, especially those using asset-light or hybrid models, fit well into this category. They have strong growth potential but may not yet have the balance sheet size for a main-board listing."
Shiva agreed the SMEs provide a more streamlined and time-efficient listing process.
“For growing hospitality companies … it offers a practical route to access capital markets with relatively simplified processes and faster timelines, while remaining under the regulatory framework of the Securities & Exchange Board of India," he said.
The framework also requires growing companies to become more sophisticated with reporting.
“All regulatory compliances have to be fulfilled diligently. You have to remain compliant and keep the stock exchange informed at all times, so there is no cause for investor concern or complaint. We give regular updates to our investors. While the stock exchange mandates result declarations every six months, we have chosen to report quarterly,” Rathore said.
Perceptions
Sources said they have noted the difference in perception of their firms once listed on the SME exchanges.
“It brings transparency, improves governance and increases credibility, and for a hotel company, this has a multiplier effect. It becomes easier to raise debt, attract partners, more quickly sign management contracts and build trust with stakeholders," Jain said. "Once a company is listed, it moves from being a private story to a public growth story. That opens many more doors."
That has been the experience at Grand Continent, Shiva said.
“We raised INR29 billion ($307 million) from the market through a fresh issue of shares. We did not offload our existing holding. Instead, we increased the share capital by offering approximately 29% of shares through pre-IPO and IPO allotments. Today, promoters hold 70% while the public holds 30%. Our lot size was 1,600 shares of INR10 each ($0.11), at a premium of INR62 ($0.66) per share,” he said.
Jungle Camps’ hotels are mostly beside tiger reserves, of which India has 58. Rathore stating that to 20 of these are significantly underserviced and have little or no tourist infrastructure.
“These are extraordinary places waiting to be experienced. To expand in such destinations and build the company further, we needed capital, and we accessed it through an IPO,” he said, explaining the decision to list on the BSE SME. “The funds have been deployed … toward expansion of hotel properties, debt repayment and general corporate purposes supporting (our) growth strategy."
Jain said there are some downsides, such as lower liquidity, limited research coverage and higher price volatility.
“This is because the investor base is smaller, and free float is restricted. Large institutional investors like private equity funds, and mutual funds typically prefer larger, more liquid companies,” he said.
He added that companies such as his are on these investors’ radars, though.
“Ultimately, serious capital follows quality, governance, growth and profitability, not just the listing platform,” Jain said.
Shiva said that “the SME platform serves as a foundation for future institutional participation as Grand Continent continues to scale.”
Jain, Rathore and Shiva already are planning their jumps to the larger stock-market stage.
Noesis is planning the move to one of the main bourses within the next four to five years, Jain said.
“Our compliance standards at the SME exchange are already aligned with those of the main exchanges. There are more properties in the pipeline,” Jain said. “Once the company scales up in terms of revenue, profitability and governance standards, migration to the main board becomes a logical next step. This journey from SME to main board is already visible across sectors and is a strong value creation pathway for investors.”
Shiva said Grand Continent is evaluating migration in the future, "subject to achieving the required financial scale, profitability and regulatory criteria."