The Bombay Stock Exchange has issued new conditions for listing of companies on its SME platform through IPO. These include a visit to the company’s site undertaken by the BSE before granting of approval to use the name of the exchange in the offer document. Additionally, it will be desirable for the company to file a compliance certificate by a Practicing Company Secretary according to the guidance note issued by the Institute of Company Secretaries of India as and when such a certification is made applicable by the SME platform of the BSE.

New norm

Companies are already required to comply with the quantitative eligibility norms as prescribed by the BSE and now, in addition to compliance with the eligibility norms, companies would have to comply with this new norm.

Furthermore, the exchange is replacing the existing guidelines with new guidelines for migration from SME Platform to the main board of the BSE. Under the new eligibility criteria for migration, companies have to be mandatorily listed and traded on the SME Platform for a minimum period of two years.

BSE through its circular dated April 19 had laid down the eligibility norms for the company desiring to get listed on its SME Platform and also the guidelines for migration from SME Platform to the main board of the BSE.

Commenting on the new migration guidelines put in place by the BSE, Prithvi Haldea, Chairman and Managing Director Prime Database said: “For smaller companies with limited liquidity two years is a good track record time for the exchange to monitor its performance and compliance on the SME platform before it migrates to the main exchange.

“This is a good move for the market and the small investors as when these small companies come on the main exchange they will draw attention of the small investors. For the companies too, 2 years is not a very long period before the company can access a larger investor base on the main exchange.”

(This article was published on November 27, 2012)
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