National Stock Exchange (NSE) MD and CEO Ashish Kumar Chauhan emphasized the importance of entrepreneurs concentrating on building profitable and sustainable businesses rather than being swayed by short-term stock price fluctuations. He highlighted that strong business fundamentals are key to driving long-term market value. Chauhan, speaking at the JITO Incubation and Innovation Foundation’s (JIIF) Foundation Day event at the NSE, urged startups and MSMEs to consider public listing as a strategic tool for business expansion.
Public markets, according to Chauhan, offer growth capital, enhance governance standards, boost credibility, and aid in talent acquisition while allowing business owners to maintain control. He advised founders to focus on business operations and profitability rather than being overly concerned with daily share price movements. Chauhan stressed that the stock market merely reflects a company’s performance and is not the business itself.
Emphasizing the benefits of public listing, Chauhan mentioned that founders can raise growth capital without relinquishing control. By initially offering 25% equity to the market and retaining 75%, promoters can dilute further only as necessary for business growth. Listing also leads to improved governance standards, increased credibility, analyst coverage, and easier access to bank financing.
Chauhan further explained that public markets reward profitable businesses with valuations that private balance sheets cannot match. For instance, a company generating an annual profit of Rs 2 crore could potentially achieve a market capitalization of Rs 40 to 50 crore post-listing, enabling the promoter to raise capital, bring in partners, and expand operations.
