Listing your small-cap company on India's stock exchanges, such as the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), can enhance visibility and provide access to capital. Both exchanges offer specialized platforms for small and medium enterprises (SMEs) with tailored listing requirements.
NSE Emerge Platform:
NSE's Emerge platform caters to SMEs aiming to go public. Key eligibility criteria include:
Post-Issue Paid-Up Capital: The company's post-issue paid-up capital should not exceed ₹25 crores.
Track Record: The company must have a track record of at least three years. If the company has not been operational for three years, it must have been funded by banks, financial institutions, central or state government, or be a part of a group company listed on either the main board or SME board of the exchange for at least two years.
Financials: The company should have positive cash accruals (Earnings Before Depreciation and Tax) from operations for at least two financial years preceding the application and a positive net worth.
BSE SME Platform:
BSE's SME platform is designed for small enterprises seeking to list. The primary requirements are:
Post-Issue Paid-Up Capital: The company's post-issue paid-up capital should not exceed ₹25 crores.
Net Tangible Assets: The company should have net tangible assets of at least ₹3 crores as per the latest audited financial results.
Track Record: The company must have a track record of at least three years. If the company has not been operational for three years, it must have been funded by banks, financial institutions, central or state government, or be a part of a group company listed on either the main board or SME board of the exchange for at least two years.
Common Requirements for Both Platforms:
Dematerialization: The company must facilitate trading in dematerialized form.
Corporate Website: Maintaining an updated corporate website is mandatory.
Investor Grievance Mechanism: A robust mechanism for redressing investor grievances should be in place.
Recent Regulatory Developments:
In May 2024, the Securities and Exchange Board of India (SEBI) proposed stricter regulations for SME listings to curb misuse of the platform. The proposed changes include setting a minimum offer size between ₹300 million to ₹500 million and enhancing disclosure requirements.
Next Steps:
- Assess Eligibility: Ensure your company meets the specific criteria outlined by the chosen exchange.
- Engage Professionals: Consult with a SEBI-registered merchant banker experienced in SME listings to guide you through the process.
- Prepare Documentation: Compile necessary documents, including audited financial statements, business plans, and compliance reports.
- Submit Application: File the application with the chosen exchange, adhering to their prescribed procedures.
- Comply with Regulations: Stay updated on regulatory changes and ensure ongoing compliance with listing requirements.
By diligently following these steps and staying informed about regulatory developments, you can navigate the listing process effectively and position your company for growth in the public market.