In the dynamic world of investment banking, GYR Capital Advisors stands out as a trailblazer, committed to realising the dreams of countless businesses across India. Led by the visionary Abhishek Sharma and Mohit Baid, GYR Capital Advisors exemplifies excellence and innovation in the financial sector. Abhishek, a Chartered Accountant with a decade of rich experience, brings invaluable expertise from his tenure at leading organizations such as the Godrej Group and Zydus. His comprehensive knowledge spans Corporate Finance, Merchant Banking, Valuations, Tax Advisory, and more. Complementing him is Mohit Baid, a qualified Company Secretary with over seven years of experience, specialising in SME IPOs, Main Board IPOs, Capital Restructuring, and Mergers and Acquisitions. Together, they spearhead GYR’s mission to connect the right businesses with the right investors, ensuring that capital is never a hurdle for growth-minded entrepreneurs. Join us as we delve into their inspiring journey and their relentless pursuit of empowering India’s business aspirations.
Here are the excerpts from the Spotlight Interview given to Small Enterprise India, showcasing the insights and expertise of GYR Capital Advisors.
Question: GYR Capital Advisors has been instrumental in guiding SMEs through the IPO process. Can you share some success stories of how your firm has helped SMEs go public and the impact it had on their growth?
GYR Capital Advisors, a horizontally managed organization with no hierarchy, thrives on an open ecosystem in investment banking, eliminating silos and fostering excellence in the SME ecosystem since its inception. As the first merchant banker to conduct back-to-back Qualified Institutional Placements (QIPs) for Phantom Digital Effects Limited and Anlon Technology Solutions Limited, we pride ourselves on our commitment to not just list companies on stock exchanges, but to support growth-oriented entrepreneurs with a “walk the talk” philosophy. We believe that “capital should not be a challenge for growth-minded entrepreneurs.” This dedication is evident as six out of the ten most subscribed IPOs in the SME ecosystem are from GYR Capital, including companies like HOAC, Kay Cee Energy and Infra, Medicamen Organics, Maxposure Limited, Trident Techlabs, and Koura Fine Diamonds. Our investors’ trust in us drives our relentless pursuit of finding great companies. Additionally, GYR Capital has successfully handled two of the top three largest IPOs on NSE Emerge, with ABS Marine Services raising ₹96.29 crores and Petro Carbon and Chemicals Ltd raising ₹113 crores. At GYR Capital, we support every visionary entrepreneur, regardless of the size of the fundraising.
Q.Your services cover a wide range of financial solutions, including IPOs, rights issues, and mergers & acquisitions. How do these services collectively support SMEs in achieving their long-term financial goals?
At GYR Capital, our goal extends beyond being transactional; we aim to support the entire ecosystem comprehensively. We believe in not only monitoring but also mentoring visionary promoters. Whether it’s a Rights Issue, QIP, preferential allotment, or pre-IPO, we strive to be present whenever a business faces capital challenges. We’ve managed the ₹230 crore Rights Issue of Orient Green Power Limited and executed or are in the process of executing Rights Issues for companies like Samor Reality, DMR Hydroengineering, Yug Decor, and Refex Industries. We advised Rajkot-based extrusion machine manufacturer Rajoo Engineers on buyback strategies following their group company Essen Speciality’s capital raise of ₹66 crores through an IPO. Additionally, we have served as advisors for preferential allotments in several SME companies such as Kore Digital Ltd, Naapbooks, and Ascensive Educare. Our advisory and due diligence services also extend to enhancing governance practices and ESOP strategies for SMEs like Virtuoso Optoelectronics, Rox Hitech, Digi Kore, and Mcon Rasayan Ltd. Our commitment is to build a robust landscape for SMEs in every segment, enabling better capital raising and effective allocation with smooth corporate governance, ultimately unlocking greater value for stakeholders.
Q. India is a land of business aspirations, and GYR Capital Advisors helps fulfill these dreams. What are the key factors you consider when selecting SMEs for IPOs and other financial services?
The most basic factor in selecting any company is its management. While capital can be raised from multiple sources, the key determinant of success is a wise management team that can utilize that capital efficiently, profitably, and ethically. The vision and thought process of the management are crucial, as they play a major role in not only bringing in profits but also in enhancing the organization’s reputation and maintaining strong relationships with associates, investors, and other stakeholders. If we have confidence in the management’s ability to maximize the potential of the capital, we are more than happy to collaborate with them in the process of fundraising.
Q. The journey to an IPO can be challenging. What are some common obstacles SMEs face during this process, and how do GYR Capital Advisors assist in overcoming them?
SMEs are often small companies that are new to the market and, before considering an IPO, many of them lack an organized culture. This is usually due to budget constraints preventing the hiring of proper compliance officers, as well as a lack of awareness about audits and other critical areas. When we associate with companies to take them public, we onboard various new parties and agencies to streamline and organize operations. We ensure that all paperwork, compliance, and financial aspects are meticulously managed before even filing any drafts with regulators. At GYR, we don’t just focus on completing the IPO and taking home the money; we are committed to experiencing the ground realities with the company even after the IPO. For us, it’s a long-term journey, ensuring continuous support and collaboration.
Q. Beyond the IPO, how do GYR Capital Advisors support SMEs in their post-IPO phase to ensure sustained growth and stability in the public market?
When an SME gets listed, their next three years are crucial as they prepare to migrate to the main board and trade alongside established companies. At GYR, we take immense pride in having handled 27 IPOs in the last 2-2.5 years, achieving remarkable success with one 25-bagger, two 6-baggers, two 5-baggers, two 4-baggers, two 3-baggers, and more. This
success is a testament to our unwavering support in guiding these companies through the nuances of the market. We ensure timely updates to exchanges and regulators, maintain transparency with investors and stakeholders, assist with additional fundraising needs, organize conferences, and provide comprehensive presentations to maximize their reach.
Q. Valuation is critical for an IPO. Can you explain the process GYR Capital Advisors follows to accurately value an SME and ensure it attracts the right investors?
GYR Capital firmly believes that “an apt valuation is a marriage between stories and numbers.” When a promoter expresses their desired valuation, we delve deeply into the numbers and the narrative behind them. Understanding whether the story can realistically achieve the proposed numbers is crucial. For SME companies, valuation is more of an art where passion meets execution. GYR Capital does not adopt a regressive approach based solely on book value or price-earnings ratio. Instead, we embrace a holistic view, recognizing the unique potential and story of each enterprise. In our quest to elevate the SME ecosystem in the listing space, we aim to onboard institutional equities due to their higher risk appetite. Reflecting our commitment, out of the 27 IPOs we have handled in the last 2-2.5 years, 13 had an anchor book backed by QIBs. Notably, our IPO for ABS Marine Services received tremendous investor response, with anchor investors like HDFC Bank, Capri Global, and MoneyWise Financial Services participating for the first time in the SME space.
Q. Your advisory services span various areas, including ESOPs and FCCBs. How do these specific services add value to SMEs preparing for and navigating the IPO journey?
Our advisory services are designed to support the SME ecosystem, helping businesses grow and thrive. When a company enters the capital market, numerous structural changes occur that must be managed to establish a strong foundation for longevity.
Before an IPO, we advise companies to develop a robust board. Privately held companies often lack a diverse board, so we recommend including industry analysts, ex-bankers, sector-specific macroeconomists, and former government officials.
Company culture is a crucial, albeit invisible, force behind successful businesses. To build a strong culture, employees must be deeply committed, embodying a “skin in the game” and “man on a mission” mindset. This is achievable through well-crafted strategies involving ESOPs, phantom stocks, and sweat equity. We have successfully advised and executed numerous ESOP strategies for SMEs and larger companies.
We believe that raising capital at the right time and in the right amount is vital for building a strong foundation. Our focus is on institutional capital during IPOs, pre-IPO funding, late IPO funding, and post-IPO capital raising through QIP, preferential allotments, or FCCBs.
A prime example of this strategy is Airbnb. In April 2020, during the height of the COVID-19 crisis, Silver Lake and Sixth Street invested $1 billion in Airbnb through a mix of equity and debt. This strategic move enabled Airbnb to go public on December 10, 2020, and grow into a $96 billion company. This underscores the importance of timely capital for business longevity.
Q. GYR Capital Advisors emphasises connecting the right businesses with the right investors. What strategies do you employ to ensure a perfect match between SMEs and potential investors?
Every business requires a specific type of capital—growth, risk, or survival—each with its unique risks and rewards, attracting different sets of investors. At GYR Capital, we specialize in matching the right type of capital with the right businesses, striving to bring institutional capital to SMEs. Institutional capital, often referred to as “wisdom capital,” is typically backed by fund managers and analysts, and is invested based on the capabilities of promoters and their visionary growth paths.
We have seen successful participation from institutions like HDFC Bank Ltd, Capri Global, MoneyWise Financials, Finavenue Capital, India Ahead Venture, and Negen Capital in our IPOs and QIPs. Institutional equity is poised to be very beneficial for the growth of the SME ecosystem.
Another promising area is the Alternative Investment Funds (AIF) segment. Since its inception in 2012 as a registered QIB category, it has become mainstream in asset allocation, with over ₹4 lakh crore invested to date. The SME segment is rapidly attracting this type of capital, and GYR Capital is actively targeting these investors.
Q. How do GYR Capital Advisors ensure robust corporate governance and compliance for SMEs throughout the IPO process and beyond?
In a privately held organization, accountability rests with its owners, whereas a listed company becomes accountable to shareholders post-listing. This responsibility, if managed correctly, can provide a significant advantage, laying a solid foundation for long-term sustainability. Corporate India boasts numerous exemplary companies like Infosys, Tata Group, and Godrej Group, renowned for their best practices in corporate governance.
Corporate governance entails transparency to shareholders, adherence to timely compliances, and providing forward-looking guidance. At GYR Capital, we deeply understand the essence of corporate governance. To strengthen the position of our SME clients, we advise management on ensuring timely compliance, utilizing raised funds effectively according to their objectives, voluntarily reporting quarterly, mandating half-yearly reports, and consistently delivering investor presentations and transcripts with each financial update. These practices are instrumental in earning shareholder confidence.
Therefore, our team at GYR Capital continuously mentors and monitors our SME clients, providing guidance to prepare them for migration to the main board.
Q. Looking ahead, what new trends do you foresee in the SME IPO landscape in India, and how is GYR Capital Advisors preparing to adapt and lead in this evolving market?
In the SME space, a major trend we observe is the emergence of visionary entrepreneurs who are young and enthusiastic about taking their businesses to new heights, creating value and wealth for all stakeholders. The transformation of the entrepreneurship landscape in India has been facilitated by easy access to capital, PLI schemes, incentives, and budget allocations. This has paved the way for visionary entrepreneurs not only in sunrise industries but also in commoditized sectors, where they can demonstrate their capabilities effectively.
At GYR Capital, we have always embraced a continuous learning curve. We conduct team meetings every weekend to review project progress, share updates, and ensure everyone is informed about ongoing work to avoid repeating mistakes. Additionally, we allocate time for book readings and learning from industry experts. These practices are integral to our own growth and enable us to effectively guide SMEs in their financial market journey.