Bombay Stock Exchange Limited (BSE) has set up the BSE Start-up Platform according to the rules and regulations of the Securities and Exchange Board of India (SEBI). BSE Start-up Platform offers an entrepreneur, an Investor friendly environment which enables the listing of Small and Medium Enterprises (SMEs) from the unorganised sector scattered throughout India into a regulated and organised sector.
As on date, the market statistics are as under:
| Number of companies Listed on BSE Start-ups till Date | 4 |
| Market capital of companies Listed on BSE Start-ups till Date (INR in Cr.) | 65.38 |
| Total Amount of Money Raised till Date (INR in Cr.) | 19.00 |
Source: www.startupbse.com
Sectoral Analysis:
Salient Features of ‘BSE Start-up Platform’ listing:
Benefits of Listing on BSE Start-up Platform
Applicability:
The company should have been registered under the Companies Act, 2013 and should be in existence for at-least a period of two years on the date of filing the draft prospectus with BSE.
and
“Startups” to be listed on the BSE startup platform must be in the fields of IT, IT’s, biotechnology and life sciences, 3D painting, space technology, e-commerce, high-tech defense and drones, nanotechnology, artificial intelligence, big data, augmented / virtual reality, electronic games, exoskeleton, robotics, holographic technology, genetic engineering, variable computer-in-body computer technology and other high-tech industries.
and
The company should be registered as a Start-up with MSME/DIPP, OR If not registered as such, the company’s paid-up capital shall be a minimum of INR 1 Crore.
Financial Criteria:
- The net worth should be positive.
- Preferably, there should be investment by QIB Investors [as defined under SEBI ICDR Regulations, 2009] I Angel Investors I Accredited Investors for a minimum period of 2 years at the time of filing of the draft prospectus with BSE.
- In case the company is not registered as a start-up with MSME I DIPP, the company’s paid-up capital should be minimum INR 1 crore.
- The post-issue paid-up capital of the company [face value] shall not be more than INR 25 crores.
Other Requirements:
- It is mandatory for businesses to have a website.
- It is imperative that the company facilitates trading in Demat securities and contracts with both the custodians.
- The company’s promoters have not changed for a year since the application date to BSE for admission to the startup segment.
Disclosures:
A certificate from the Applicant Company I Companies that states the following:
1. The company is not mentioned on the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016.
2. There is no petition for companies approved by the National Company Law Tribunal (NCLT).
3. None of the Promoters I Directors of the company have been debarred by any regulatory agencies.
Compliance on BSE Start-up Platform:
Preparation for an IPO:
An IPO is one of the important means of funding a company that aims for sustainable growth. Therefore, it is important for all companies to know the requirements before entering the capital market.
The following is an overview of the IPO process and activities:
Migration from BSE Start-up Platform to the Main board:
Companies that want to switch to BSE mainboards must meet the approval criteria.
A company has to be listed and traded on the BSE startup platform for a minimum period of two years and then they can migrate. To the mainboard according to the guidelines set by SEBI vide their circular dated 18th may 2010 and as per the procedures laid down in the ICDR guidelines Chapter IX.
Key Comparison between BSE Start-up IPO listing and BSE SME IPO listing:
| Particulars | BSE Start-up IPO listing | BSE SME IPO listing |
| Applicability | Company incorporated under Companies Act,2013 | Companies incorporated under the Companies Act 1956 or existing partnerships / LLPs converted into companies under the Companies Act 2013 |
| Pre-IPO paid up capital threshold | INR 1 Crore | INR 3 Crore |
| Track record | At least 2 years | At least 3 years |
| Funding criteria for applicability | Investment by QIB investors I Angel investors I Certified investors must have been for at least 2 years after submitting the BSE prospectus | Funded by a loan / financing from a bank, financial institution, central government, state government or their operator, or
The group company must be listed on either the National Exchange Mainboard or the SME Board for at least two years |
| Cap on Cash Accruals (Earnings before Interest and Depreciation) | No limit | Positive |
| Disclosure requirements for promoters / directors to achieve transparency and integrity between management | Promoters / directors of the company are not banned by regulators | No special conditions |
| Specific condition for Migration to Main board | At least 2 years on the BSE start-up platform | The capital is INR 10 Crore or more + the market capitalization is INR25 Crore or more |
Other Income tax concessions to Start-ups:
How can InCorp India help you?
At InCorp India, we are committed to delivering quality in Assurance, Tax and Advisory services. Our combined dedicated team of Corporate Advisory, Valuation, and Investment Banking and Taxation experts can help you plan and prepare for the IPO, conceptualising the process, pre and post issue compliance and provide the ease for filing the required compliances. We can assist you not only in terms of compliance but also to evaluate the eligibility of listing, valuation principle specific to business by evaluating cost-benefit analysis. If you are interested, you can write to us at ‘info@incorpadvisory.in’.
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