NSE set to launch SME platform in 4 weeks

Our Bureau Mumbai | Updated on September 13, 2011 Published on September 13, 2011

Doubts linger over safety of investor wealth

The National Stock Exchange (NSE) is set to launch its much-awaited SME exchange in the next three to four weeks.

Both the BSE and the NSE have received approval from SEBI to start their own SME trading platforms. “We are going to launch the SME exchange very soon,” said Mr K Hari, Vice-President, NSE, on the sidelines of an event.

Officials at the Bombay Stock Exchange (BSE) were unavailable for comment as to when they were planning to start their SME exchange. There have been speculations on the launch date of SME trading platforms ever since the bourses had applied to SEBI in July 2010.

“There have been a lot of discussions related to the launch of the SME exchange. Nothing proper has come out of the discussions,” said Mr Chandrakant Salunkhe, Founder and President of the SME Chamber of India.

There are over 26 million SMEs in India. New SMEs as well as the 4,000 companies which are listed in the small- and mid-cap sector of the BSE can be listed on the SME exchange.

Sources had said earlier this year that all the small-cap stocks on the bourses may be pushed into their SME exchanges. This still remains unclear from the side of the bourses.

While the SME trading platform may come as good news to the SMEs who are in need of raising money, investors and analysts alike are concerned about some of the risks associated with the SME platform.

There has been much said and done about the infrastructure or the ‘hardware” side of the SME trading platform but important factors have been ignored, “Investors' experience of small- and mid-cap stocks is not satisfying. Much focus is on the hardware and not the software (investor side),” said an official from a private sector bank.

NSE is confident that there is nothing risky about the SME exchange. “We are facilitating ways to monitor the compliances of the SMEs. We will ensure that companies meet all the necessary regulations,” said Mr Hari.

SMEs are prone to a variety of problems such as repayment problems, faulty balance sheets and lack of funds. Ms Dolly Dhamodiwala, CEO of Business Beacon, who specialises in SME development and finance said.

“This SME trading platform is a good initiative but they should make credit rating mandatory as this will instil confidence in the investors.”


Published on September 13, 2011
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