Finance Buddha, a phygital lending marketplace, has received the in-principle approval from NSE Emerge to launch its small and medium enterprise (SME) initial public offering (IPO).

The lending enabler is backed by investor Ashish Kacholia, MS Dhoni Family Office, and Shankar V, who founded Computer Age Management Services (CAMS) and is associated with The Chennai Angels network.

The Mumbai-based company plans to use the IPO proceeds to expand it markets, among others, it said in a statement.

The company, operated by Finbud Financial Services Ltd, did not disclose the amount it intends to raise via the IPO.

Companies in India's SME Exchange IPO typically raise between Rs 2 crore and Rs 25 crore

Finance Buddha was established in 2012 by co-founders Vivek Bhatia, Parth Pande, and Parag Agarwal. The platform operates as a comprehensive retail credit marketplace serving both individual consumers and small businesses through its hybrid distribution model that combines agent-led services with digital technology.

The company facilitates loan comparisons and approvals across personal, business, and home loan categories through its proprietary matching system and advisory framework, covering more than 19,000 postal codes nationwide.

Finance Buddha had first raised external capital from The Chennai Angels in 2016.

The SME IPO segment has seen increased interest from companies seeking growth capital and market validation in the past years.

Last year, around 240 SMEs raised over Rs 8,700 crore, nearly double the Rs 4,686 crore scooped in 2023, as per primedatabase.com data.

Earlier this year, markets regulator Securities and Exchange Board of India (SEBI) notified a stricter regulatory framework for SME IPO by introducing a profitability requirement and imposing 20% limit on offer-for-sale (OFS).