The Hindu Business Line : BSE to allow listing of cos with Rs 3-cr capital

IN an effort to encourage small companies to tap the primary market, the Bombay Stock Exchange (BSE) on Monday decided to permit listing of the shares issued by small cap companies.

Under this, companies having paid-up capital of Rs 3 crore, after the issue, can list on the exchange. Other conditions for listing on the BSE include minimum turnover of Rs 3 crore in each of the previous 3 years and should have a minimum of 500 shareholders.

At present, the BSE allows listing of shares of the companies with a post-issue capital of Rs 10 crore or a post-issue capital Rs 5 crore with a market capitalisation of Rs 50 crore.

Apart from BSE norms, these companies would be required to meet the SEBI guidelines for making public issue. In the case of NSE, the listing requirements are paid-up capital of Rs 10 crore, a market capitalisation of Rs 25 crore and for the knowledge-based companies, the requirement is Rs 5 core paid-up capital and market capitalisation of Rs 50 crore.

Addressing a press conference here, Dr Manoj Vaish, Chief Executive Officer (CEO) and Executive Director (ED), BSE, said: "This measure would enable small companies to raise fresh capital, which would help growth in economy and overall development of the country. This would also enable the companies, which are currently listed only at regional stock exchange to have national presence through BSE's trading platform."

To avoid unscrupulous companies to raise money from investors, the BSE has laid down some strict norms that include a due-diligence to be done by an exchange-appointed independent team of chartered accountants or merchant banker.

In addition, the company getting listed on the BSE would be required to hold a shareholders' meeting at least once in a year in Mumbai. For these companies to be traded on the exchange, the BSE has plans to create a distinct securities segment "S".

On the small companies with paid-up capital of Rs 3 crore and already listed on the BSE, Dr Vaish said over a period time these companies would be shifted to the new segment.

Asked on the exchange plans to join with Indonext exchange, where companies (having small cap) listed on regional stock exchange can be traded on the BSE trading platform and its impact on this segment, he said, "Indonext proposal is still on and it has nothing to do with listing of small cap companies on BSE".

"Any good company would like to list on BSE as big and institutional investor prefer to buy and sell stock listed on BSE rather on regional stock exchanges," he added.

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