The BSE SME Exchange has been setup by the Bombay Stock Exchange (BSE) to provide Small and Medium Sized Enterprises (SMEs) a platform for raising equity capital for their growth and expansion. SMEs are the backbone of a nation’s economy and Indian. In 2010, The Prime Minister’s Task Force recommended the setting up of a dedicated Stock Exchange for SMEs and SEBI also laid down the regulations for the governance of a SME Exchange. Based on the above, the BSE SME Exchange was established to provide opportunity to Entrepreneurs to raise equity capital for the growth and expansion of SMEs.
Pursuant to that, let us highlights some of the important aspects of the SME IPO
|Particulars||Requirements for BSE SME IPO|
|Ø Company||Ø Limited Company.|
|Ø Post issue Paid up capital||Ø Minimum Rs. 3 Crores to Rs. 25 Crores.(Entities having more then 25 cr post issue paid up capital has to mandatorily switch over to Main Board)|
|Ø Net Worth||Ø Minimum Rs. 3 Crores as per the last audited balance sheet.|
|Ø Net Tangible Assets||Ø Minimum Rs. 3 Crores as per the last audited balance sheet|
|Ø Track Record||Ø Profits for atleast 2 years out of 3 preceeding financial years or Net worth of Rs. 5 Crores.|
|Ø Website||Ø Mandatory|
|Ø Investors||Ø Minimum 50|
|Ø Underwritten issue||Ø 100% underwritten issue|
|Ø Market Making||Ø Mandatory for 3 years|
|Ø Trading size||Ø Minimum Rs. 1 Crores.|
|Ø Starting of an Assignment||X|
|Ø Completion of Due Diligence including ROC Compliances, Restatement of Financials and creation of backup for prospectus.||X+45|
|Ø Filling of an offer document||X+55|
|Ø Approval of a Stock Exchanges||X+70|
|Ø ROC Filling||X+75|
|Ø Issue Opening||X+80|
|Ø Issue Closing||X+85|
No SEBI Approval and In-principal approval of Stock Exchanges is required, Hence, their fees are eliminated.
Lesser compliances compare to main board listing so convenient for SMEs. Half yearly financial results, shareholding pattern is to be complied with exchanges on a half yearly basis. No publication of financial results in a newspaper, only hosting on a company’s website is enough.
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