27-Nov-2023
2 mins read
The Bombay Stock Exchange (BSE) has unveiled new guidelines tailored for small and medium enterprises (SMEs). Aimed at SMEs planning to shift from the BSE’s SME platform to the main board, these guidelines mark a crucial move in promoting the development and scaling of SMEs in India.
Key Requirements for Migration
- Net Worth Criteria: One of the primary requirements under the new guidelines is for the applicant SME to have a net worth of at least Rs 15 crore during the two financial years preceding the application.
- Listing Tenure and Public Shareholders: Additionally, SMEs must have been listed on the BSE’s SME platform for a minimum of three years. They should also have a base of at least 250 public shareholders before they can consider migrating to the main board.
- Financial Performance: The guidelines stipulate that the SME must demonstrate a positive operating profit in any two of the past three financial years. Moreover, it is mandatory to have a positive profit after tax (PAT) in the immediate financial year preceding the migration application.
- Equity Capital and Market Capitalisation The paid-up equity capital of the applying SME is required to exceed Rs 10 crore. Additionally, the market capitalisation of the SME must be a minimum of Rs 25 crore.
Additional Eligibility Criteria
- Legal and Regulatory Compliance: The applicant company must not be the subject of any winding-up petition admitted by the National Company Law Tribunal (NCLT). There should also be no significant regulatory action, such as suspension of trading, against the SME and its promoters by any stock exchange in the past three years.
- SEBI Compliance: It’s crucial that neither the applicant company nor its promoters or subsidiaries are debarred by the Securities and Exchange Board of India (Sebi).
Adjustments in SME Platform Eligibility
The BSE has also made adjustments to the eligibility criteria for listing on the SME platform, aligning it with the new guidelines for migration.
Implementation and Impact
The new guidelines are set to be effective from January 1, 2024. Since the inception of the BSE SME platform in March 2012, 464 companies have been listed, with 181 successfully migrating to the main board. The introduction of these guidelines is anticipated to streamline the migration process, aiding SMEs in their journey towards growth and expansion.