Crisil in its latest report has said that a fourth of Indian micro, small and medium enterprises (MSMEs) have lost 3 per cent or more of their respective market share to big corporations during the Covid pandemic. It analysed MSMEs from 69 sectors and 147 clusters having a revenue of Rs 47 lakh crore or a fourth of India's GDP to arrive at the details on how the small businesses fared during the pandemic.
It mentioned that half of these companies which witnessed a loss of market share also saw a contraction in their operating profit. It can be noted that the impact of the pandemic on the smaller businesses has been a subject of interest because of their vulnerabilities due to size.
Its director Pushan Sharma said ‘large ones leveraged their global presence to procure raw materials, so could eat up a huge chunk of the SME pie. He said supply chain disruptions impacted small pesticides manufacturers more, while edible oil SMEs (Small and Medium Enterprises) lost market share due to an increase in hygiene quotient as the pandemic meant less buyers for oil sold in loose. He added pesticides and edible oil SMEs suffered margin contraction of 1 per cent and 2 per cent, respectively, due to partial pass-through of the increase in raw material costs, which jumped by 60 per cent.
