Guidelines for SMEs for Public Issue through SME Platform of BSE

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Business Mantra: Faridabad

                                                                 BSE SME Part-2

A SME Company with Rs.1 Crore Net worth may get equity funding upto Rs.25 Crores by utilizing the SME Platform of BSE.

Following are the main guidelines for IPO of small and medium companies at SME Platform of BSE:-

 

  1. Capital for SME Platform: – If the company’s total face value of capital after the issue is in between Rs. 1 Crore to Rs.10 Crore then issue will be covered under SME Platform.
  2. If the total post issue face value capital is between Rs.10 Crore to Rs.25 Crore then, option with the SME Company is available to bring the issue through SME Platform or through main Board of BSE.
  3. If total Post issue face value of capital is more than Rs.25 Crores then, company can bring the issue through main Board of BSE.
  4. Net worth of the company excluding Revaluation Reserves should be at least Rs.1 Crore as per latest audited financial results.
  5. Net tangible assets should also be Rs.1 Crore as per latest audited financial results.
  6. Out of last 3 financial years, distributable profit of the company for minimum 2 years should be positive. Otherwise net worth of company should be at least 3 Crores.
  7. Company should necessarily have a website and should necessarily provide its shares in demat form and trading in demat is also to be insured.
  8. Any application for Winding-up by the company has not been accepted by any Court/Tribunal.
  9. Issue should be 100% underwritten and the merchant banker should underwrite atleast 15% of the issue in their own account.
  10. All existing stock brokers of BSE (trading members) would be eligible to participate on SME Platform. There is no need of fresh or further registration.
  11. Merchant Bankers of the issue will be responsible for market making for 3 years minimum, through stockbrokers, who is registered as market maker with SME Platform.
  12. Minimum 50 investors are required at the time of listing IPO. Once the IPO is listed then there is no restriction/requirement of minimum no. of investors.
  13. Time to time various changes in guidelines are issued by SEBI and BSE which may be seen at websites of BSE and SEBI.

Any other information relating to BSE & SME will be provided in our next article BSE-SME (Part-3)

CA Sanjay Kumar, Consultant Editor Business Mantra Author may be reached at info@businessmantranews.com

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