BSE SME Exchange is an SME focused stock exchange, monitored and operated by Bombay Stock Exchange as per the rules and regulations laid down by SEBI. The platform helps entrepreneurs and small business owners to secure fund from the industrial investors of the country. It also provides opportunities to identify and invest in good companies at an early stage, long term Capital Gain tax benefit and Exit Route to the investors. So this is a win-win platform for entrepreneurs and investors both. Here in this article, we have explored about the BSE SME exchange listing requirements, advantages, procedures and eligibility criteria.
Advantages Of BSE SME Exchange Listing
BSE SME provides an avenue to raise capital through equity infusion for growth oriented SME’s.
- The SME’s benefit by greater credibility and enhanced financial status leading to demand in the company’s shares and higher valuation of the company.
- Equity financing provides growth opportunities like expansion, mergers and acquisitions thus being a cost effective and tax efficient mode.
- It provides an incentive for Venture Capital Funds by creating an Exit Route and thus reducing their lock-in period.
- Employee Stock Options ensures stronger employee commitment, participation and recruitment incentive.
BSE SME Exchange Listing Criteria
- The net tangible asset of the company must be at least Rs 3 Crore as per the last audited financial statement of the company.
- The post-issue paid-up capital of the company shall be at least Rs. 3 crore.
- Net worth (excluding revaluation reserves) of at least Rs.3 crore as per the latest audited financial results.
- The company must have a track record of distributable profits in terms of Section 123 of the Companies Act 2013 for at least two years out of immediately preceding three financial years. Extraordinary income will not be considered for the purpose of calculating distributable profits. Otherwise, company’s net worth shall be at least Rs.5 crores.
- It is mandatory for a company to have a website.
- It is mandatory for the company to facilitate trading in Demat securities and enter into an agreement with both the depositories.
- There should not be any change in the promoters of the company in preceding one year from date of filing the application to BSE for listing under SME segment.
BSE SME Exchange Listing Procedure
The listing procedure is simple compared to other stock exchanges. Planning is the first part of listing. You must appoint Merchant Banker/s in an advisory capacity. The merchant banker’s responsibility is to prepare the filing document. Next step is the submission of DRHP/Draft Prospectus to the Exchange as well as with SEBI as per requirements. The exchange verifies the documents and processes the same. A visit to the company’s site shall be undertaken by the Exchange official.
The Promoters are called for an interview with the Listing Advisory Committee. After getting satisfied, BSE issues an In-Principle approval on the recommendation of the Committee, provided all the requirements are compiled by the Issuer Company. Then your merchant banker will file documents with the ROC indicating the opening and closing date of the issue. Once approval is received from the ROC, they intimate the Exchange regarding the opening dates of the issue along with the required documents. To know more about BSE SME Exchange listing, visit the website HERE.