New Delhi: Leading stock exchange BSE has allowed broking and micro-finance companies to get listed on its small and medium enterprise (SME) platform, a move that will encourage such entities to tap the IPO route.
The new norms will provide these companies easy access to capital, enhanced visibility, growth opportunities and exit route for existing shareholders. Earlier, such companies were not permitted to list on BSE’s SME platform.
Now, the exchange has decided to allow broking companies and micro-finance companies to get listed on the SME platform of BSE. Spelling out listing criteria for broking firms, BSE said these entities should have net tangible assets of at least Rs 3 crore in the latest audited financial results.Besides, post issue paid up capital of the company should be at least Rs 3 crore.
The firms are required to have net worth — comprise of equity, reserves and surplus — of minimum Rs 15 crore and aggregate profit before tax of Rs 5 crore in two consecutive years out of 3 immediate preceding financial years.
The extraordinary income will not be considered for the purpose of profits. For micro-finance companies, they should have a book value of at least Rs 100 crore and with a client base of 10,000 and more and it should not have accepted public deposit. Besides, the companies should have a net worth and post paid-up capital of at least Rs 3 crore.
Also, such firms are required to have net tangible assets of at least Rs 3 crore as per the latest audited financial results. Listing will help these companies to enter capital markets and finally migrate to the main board platform.
BSE launched its SME platform for small and medium enterprises in March 2012. Since then, it has been receiving very positive response and 179 companies have already got listed in this segment. Of these, 27 firms have shifted to the main board.
The platform provides opportunity to SME entrepreneurs to raise equity capital for growth and expansion. It also provides immense opportunity for investors to identify and invest in good SMEs at an early stage.