BSE receives SEBI approval for SME exchange

Our Bureau Mumbai | Updated on September 28, 2011 Published on September 28, 2011

People walk past the BSE building in Mumbai. — Photo: Paul Noronha   -  Business Line

About 20 cos seriously considering listing in new platform

The Bombay Stock Exchange on Wednesday received approval from the Securities and Exchange Board of India for its proposed SME Exchange. The approval has come more than a year after the exchange had first applied for permission for an SME exchange with the regulator in July 2010.

The SME exchange will now start receiving the offer documents from the merchant bankers for companies wishing to list on the exchange platform, said Mr Laxman Gugulothu, CEO, BSE SME Exchange. He also said that of the companies that have approached the exchange, around 30-40 per cent were very serious about getting listed on the SME exchange.

“Of the 70-80 who have approached us on the Web site, 15-20 are very serious. Apart from these, 50 other companies have shown an interest in our exchange. Of these 50, around 25 have filed a mandate with merchant bankers,” he added.

A PTI report quoted the NSE Joint Managing Director, Ms Chitra Ramakrishna, as saying, “We are awaiting the final approval from the SEBI (for its SME platform).”

However, the process of getting listed has been simplified for the SMEs. The SMEs do not require regulatory approval for entering the capital market. The exchange approval is sufficient, said Mr Gugulothu.

Special provision

For any company to get listed on an exchange, the company has to first file a draft red herring prospectus with SEBI, which then needs in-principle approval from both SEBI and the exchanges. This is followed by a one-month notification to the public.

This has been done away with for companies proposing to list on SME exchanges. An SME needs to only submit the offer documents and on receiving the exchange's approval alone can enter the capital market.

The only criteria for the SMEs to qualify for listing is that the promoter share holding to be diluted has to amount to a minimum of Rs 25 crore. This means at a face value of Rs 10/ share, the total number of shares on offer would be 2.5 crore.

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Published on September 28, 2011
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