17th July
I. The eligibility criteria for listing on SME exchange involves.
1. Post issue capital – Post issue paid up Capital of the company shall not be more than Rs.25 Cr.
2. Net profit – from last 3 years company for atleast two years company should be profitable.
3. Net worth should be 1 crore for two preceding full financial year.
4. Track record of the issuer company should be atleast 3 years.
5. Net tangible assets should be 3 cr in last preceding financial year.
II. SME listing typically involve the following process
1. Appointment of Merchant Banker
2. Review of Business plans, Restructuring of Capital
3. Appointment of others Intermediaries
4. Due Diligence of Company by Merchant Banker
5. Conversion of Public limited Company and appointment of independent Directors.
6. Making of Prospectus / offer Document
7. Obtaining approval from Stock Exchange
8. Completion of Pre-issue opening compliances
9. Filling of Prospectus offer Document
10. Completion of Post-issue Compliances
11. Issue Opening, Closing Subscription and approval of ROC
12. Listing of Shares
III. Benefits of listing
1. Access to Capital: Listing allows SMEs to raise capital from the public, enabling them to fund growth initiatives, expand operations, or pay off debts.
2. Enhanced Credibility: Becoming a listed company enhances visibility and credibility among customers, suppliers, and investors, which may potentially lead to new business opportunities and partnerships.
3. Liquidity for promoters and Investors: Promoters and early investors can monetize their investments by selling securities (or part thereof).
4. Employees – stock options may be used as a strategic tool to attract and retain talent. Offering shares/stock options to employees aligns their interests with the company’s objectives and can act as a motivational tool that encourages loyalty and dedication.
5. Improved corporate governance – Listing requires complying to stricter corporate governance norms, financial disclosures and standards. This can improve management practices, attract seasoned professionals to the board, and enhance governance of the Company.
