With the growing start-up culture in India, government is also coming up with innovative ways to boost the entrepreneurs. Providing an efficient framework to bring together Start-Ups and SMEs seeking capital and investors capable of assuming the risks and challenges of investing in an early stage company can help hasten the growth of these enterprises and help them contribute towards the national economy. If the securities of a company were listed, it would give it better visibility and thereby wider reach to investors. With a structured market for investors, existing investors in an SME or a Start-Up are more likely to find an alternate buyer than if they search for a buyer using their own network of contacts in the investment community.
In response to above “Small and Medium Enterprises (SMEs), including start-up companies, are permitted by SEBI to list on the SME exchange without being required to make an initial public offer (IPO), but the participation is restricted to informed investors. This is in addition to the existing SME platform in which listing can be done through an IPO and with wider investor participation”.
The possible eligibility routes include a minimum investment in the equity of the company by registered:
Receiving project financing or working capital financing from scheduled banks during the last 3 years is be considered as one of the eligibility routes. Apart from qualifying any of these, the company should additionally meet other conditions including, itself, its promoters and directors group companies etc. not being named in the wilful defaulters list on CIBIL, the company, its group companies and subsidiaries not having been referred to BIFR in the past 5 years, or any regulatory actions against the company, promoters or its directors in the past 5 years etc. Further to ensure that this platform is restricted only to start-ups and SMEs, it may be required that companies seeking to list on this platform are not older than 10 years or having revenues more than 100 crores or paid up capital more than 25 crores. Stock Exchanges would examine the compliance with the eligibility norms before permitting listing in this platform.
Corporate Governance and Continuous Disclosures
For the Maintenance of high standards of corporate practices, it is proposed that corporate governance norms as it applies to earlier SME exchange and main board will apply to companies listed on this proposed platform. As in the case of main board and SME exchange, such corporate governance norms would apply to a company with a paid up capital of 3 crore or above. It is proposed that the following areas may be kept as continuous disclosure requirements:
What is NSE EMERGE?
EMERGE is a credible and efficient market place to bring about convergence of sophisticated investors and emerging corporates in the country. It offers opportunities to informed investors to invest in emerging businesses with exciting growth plans, innovative business models and commitment towards good governance and investor interest. It is a platform for the best of emerging corporate to raise capital from institutional investors and HNIs.
What can SMEs get from EMERGE?
To resolve your further queries regarding NSE EMERGE platform, you are free to contact Starters’ CFO. We can assist you in getting further information and available benefits of the listing platform.
For getting your listing done, the following steps need to be kept in mind.
- Develop an understanding of the capital markets and the various processes involved in raising funds through an IPO
- Weigh the IPO option vis-à-vis other options of raising funds
- Once you choose to opt for the IPO route make a realistic assessment of your readiness for listing
- Start upgrading and strengthening your internal; processes and systems to meet the requirements of a publicly listed company
- Crystallise your project and capital raising plans
- Engage a merchant banker to assist you in the IPO process
What is BSE SME Platform?
The listed SMEs will step into the threshold of BSE SME Platform and foray in to the world of finance for further growth and development. BSE SME will assist these SMEs to raise equity capital for their growth and expansion and thus help them blossom into full fledged companies. In due time enable them to migrate into the Main Board of BSE as per the existing rules and regulations.
BSE Ltd has set up the BSE SME Platform as per the rules and regulations laid down by SEBI. BSE SME Platform offers an entrepreneur and investor friendly environment, which enables the listing of SMEs from the unorganized sector scattered throughout India, into a regulated and organized sector.
This platform gives a boost to SMEs in the country, through which government plans to enhance the economy of the nation. If you still have any unresolved query regarding this platform or its benefits, we at Starters’ CFO can provide you best assistance in all these matters.
Requisites for listing on the platform
The following requirements need to be kept in mind:
- Selection of Merchant Banker
- Restructuring of capital and valuation
- Offer Document as part of IPO
- Due Diligence as part of IPO
- Marketing Strategy
- Effective Communication of the corporate and its equity strength
Efforts taken by SEBI
The Securities and Exchange Board of India has also taken a number of efforta to allow start-ups and SMEs to get listed on the platforms available
Hence, with such big platforms being launched, we are sure that the emerging businesses will get a lot of benefits through them. The motive is to boost the economy and with such movements by NSE, BSE or SEBI, we can definitely expect better economic conditions for the country in future.