The SME list may end the year with 9.6 billion capitalisation

Euronext Growth Milan, the Italian stock exchange's market dedicated to SMEs with high growth potential, has confirmed itself as their main channel for raising capital: since 2009, it has welcomed 314 companies with 6 billion in funding. Today there are 208 listed companies with a capitalisation of 8.3 billion. The market has grown considerably since 2017, thanks to the combined effect of Individual Savings Plans and the tax credit on IPO costs (since 2016 +170% in terms of listed companies and +187% in terms of capitalisation). In 2024 (as at 12 July), with 10 debuts (Bertolotti, Distribuzione Elettrica Adriatica, Egomnia, Espe, Kruso Capital, Litix, Mare Engineering Group, Next Geosolutions Europe, Palingeo, Soges Group) and a collection of 90.9 million Egm did better than the main list where there were instead important delistings (Tod's, CNH Industrial, Saes Getters) .

These are some of the elements that emerge from the 11th edition of the Ecm Euronext Growth Milan Observatory curated by the IR Top Consulting research office. "The analyses of the Ecm Observatory show a cross-section of the Italian economy made up of SMEs that will grow in 2023, despite the challenging scenario: the 206 listed companies generate a turnover of 10.0 billion, up +5% on 2022," explains Anna Lambiase, scientific director of the Ecm Observatory and president of Cdp Venture. -A generation of value often distributed in the form of dividends: 54 companies (26% of the total) distribute an average dividend of €0.22 for a total of €135.1 million, with an average dividend yield of 3.3%'. As Lambiase points out, since its inception Egm has contributed to the growth of the regulated market with 28 companies translisting on EXM/STAR. The total capitalisation at translisting was EUR 7.3 billion and as of 12 July the 25 companies still listed on the main market capitalised EUR 15.8 billion, registering an average performance since translisting of +114%. Egm also recorded 30 takeover bids (IPOs), 42 delistings and 6 mergers. The Ecm Observatory estimates that 2024 could end for Egm with 211 listed companies and a capitalisation of 9.6 billion. The most promising sectors are HealthTech, Fashion/Luxury, AI and Industrial with a 2024 capitalisation of around EUR 160 million.

However, stock performance on the stock market does not seem to reflect fundamentals, penalised by reduced liquidity. "2024 brings with it a number of innovations that can move the market forward and enable investors to identify virtuous stocks that are today highly undervalued," adds Lambiase, "from the extension of the IPO Bonus with an allocation of EUR 6 million, which we hope will become structural, to the approval of the 'DDL Capitali' and the recent approval by the Senate Commission of the amendment on the Fund of Funds with Cdp, as well as the increase in the multiplier for multiple voting from 3x to 10x. This is a measure that can enable SMEs to grow by increasing their free float and at the same time maintaining control of the company. Not to be overlooked, then, are some regulatory proposals that we have put forward as an Observatory, aimed at stimulating the recovery of ordinary Pir and stemming the impact generated by redemptions'. Lambiase refers to the possibility of investing the maximum amount envisaged in a solution; the possibility of subscribing to several Ordinary Pir, allowing savers to diversify their investments in terms of asset class and risks; the introduction of an incentive in the form of deductibility from taxable income of a % of the sum kept in the Pir after 5 years; and an incentive in the form of a tax credit on capital losses.

It is precisely on Egm that Innovative SMEs have found their natural vocation on the capital market. There are 67 of them on Egm (33% of the total) with a total capitalisation of EUR 2.1 billion (25% of the total; the average is EUR 31.2 million) and a turnover of EUR 1.5 billion (16%). Compared to the requirements of the main list, Egm has no minimum entry criteria in terms of capitalisation, company size, governance structure and minimum number of years of existence. This, together with the introduction of the Professional Segment in 2020, has allowed many companies to list in the start-up phase. Today there are 39 start-ups (12% of the total) and 59% have listed in their third year of existence.

In the shareholding structure of the 206 companies listed on Egm as of 31 May 2024, there are 118 Institutional Investors, of which 29 are Italian (24.6%) and 89 foreign (75.4%). France is the leading foreign investor in terms of number of investment houses with 22 institutional investors (18.6%), followed by Switzerland, Germany and the UK, each with 13 investment houses (11%). In terms of amount invested, the top foreign country is Luxembourg with EUR 92 million (14.2% of the total), followed by the UK with EUR 44 million (6.8%) and France with EUR 41 million (6.3%). In terms of investment (625 million total), 342 million (54.7%) is held by Italian investors and 283 million (45.3%) by foreign investors. Algebris Investments (Luxembourg) SARL (EUR 66m, 67 investee companies), Banca Mediolanum (EUR 57.6m, 55 companies), BPER Banca (EUR 49.8m, 43 companies), First Capital (EUR 39.4m, 15 companies) and Azimut Holding (EUR 36.3m, 67 companies) are the most active investors.