What is SME Exchange ?
SME exchange is a stock exchange for trading the shares of small and medium enterprises who otherwise would find it difficult and costly to get listed in the main board of a recognized stock exchange as per SEBI (ICDR) Regulations, 2018.
Stock Exchange for SME ?
There are currently 2 stock exchange providing SME exchange :
1. BSE SME (https://www.bsesme.com/)
2. NSE Emerge (https://www1.nseindia.com/emerge/
Benefit of Listing ?
a. Easy access to Capital Infusion
b. Business Recognition
c. Corporate Governance
d. Lower Cost then Main Board
e. Enables Liquidity for Shareholders
f. Encourage Growth of business
Conditions for Listing
| Particulars | BSE SME | NSE EMERGE |
| Post Issue Capital | Post issue paid up capital of the company (face value) shall not be more than Rs. 25 crore. | Post issue paid up capital of the company (face value) shall not be more than Rs. 25 crore.
|
| Net worth | Positive | — |
| Tangible Assets | Net Tangible Assets should be Rs 1.5 Crore | —- |
| Track Records | The company or the partnership/proprietorship/LLP Firm or the firm which have been converted into the company should have combined track record of at least 3 years.
or
In case it has not completed its operation for three years then the company/partnership/proprietorship/LLP should have been funded by Banks or financial institutions or Central or state government or the group company should be listed for at least two years either on the main board or SME board of the Exchange. |
Track record of atleast three years of either
i. the applicant seeking listing; or ii. the promoters****/ promoting company, incorporated in or outside India or iii. Proprietary / Partnership firm and subsequently converted into a Company (not in existence as a Company for three years) and approaches the Exchange for listing. ****Promoters mean one or more persons with minimum 3 years of experience in the same line of business and shall be holding at least 20% of the post issue equity share capital individually or severally. And The company/entity should have operating profit (earnings before interest, depreciation and tax) from operations for atleast any 2 out of 3 financial years preceding the application and its net-worth should be positive. |
| Cash Accruals |
The company or the firm or the firm which have been converted into the company should have combined positive cash accruals (earnings before depreciation and tax) in any of the year out of last three years and its net worth should be positive |
Time Period in Listing
Minimum 3-4 months
SME IPO Process
- Appointment of Merchant Banker
- Capital Structuring, Due Diligence, and Pre-IPO preparation
- Appointment of Bankers, Registrar, Market Makers, RTA etc.
- Preparation of Offer Document (DRHP)
- Filing of DRHP with Stock Exchange
- Approval from Exchange
- Issue Pricing
- The Opening of Public Issue
- Closure of the Issue & Allocation of Shares
- Listing & Trading at the Exchange
*****
Note : For more details, understanding and listing of SME you can contact us on +91-8128918288 or ahmedabad@iskca.com.
Disclaimer: The above views and the opinion expressed or implied are on the knowledge of the author and the individual or company is advised to take due care and judgment before taking any decision.
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