The Bombay Stock Exchange(BSE) Small & Medium Enterprises (SME) Exchange has been awaiting final nod of the market regulator SEBI for launch for the last three months, a company official said on Tuesday.
"SEBI had given its in-principle approval to BSE to launch the BSE SME Exchange, but since the last three months we have been awaiting the final nod from the regulator to start operations," BSE SME Exchange Chief Executive Officer Lakshman Gugulothu said.
He was speaking at a seminar on 'SME Exchange: A Platform for Equity Finance for Small & Medium Enterprises', organised by Gujarat Chamber of Commerce and Industry (GCCI).
"BSE is leveraging the existing equity platform - BOLT system - for launching the SME exchange. This will be an integrated exchange having provision for migration from BSE SME Exchange to main board and vice-versa," he said.
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"There are around 26 million SME units in the country out of which over one million have the potential to get listed on this exchange. Initially, our target would be to reach out to one lakh SMEs in a focused manner," Gugulothu said.
"SMEs with a paid up capital of up to Rs 10 crore can come on the SME Exchange," he added.
The advantage of getting listed on this exchange shall be that no SEBI approval is required to bring out an IPO.
However, some exchange guidelines will have to be followed on it, Gugulothu said.
"Even the three years of profit making is not mandatory for a company to get listed on the exchange," he said.
According to BSE, micro, small and medium enterprises (MSMEs) contribute 8 per cent to the nation's GDP, 45 per cent to the manufactured output and 40 per cent to exports. It provides employment to about six crore people through 2.6 crore enterprises.
"The trading on this platform shall be done in lots instead of individual shares," Gugulothu said.
Speaking on eligibility criteria for companies, he said "At least 50 investors are needed at the time of the IPO and each investor should invest at least Rs one lakh. The post-issue paid-up capital can be as less as Rs 50 lakh."
However, grading of the IPO shall be mandatory and clause 49, which mandates 50 per cent of the directors to be independent directors on a company's board, shall be applicable, he said.