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With far easier listing rules and significantly smoother regulatory mechanism, many small and medium enterprises (SMEs) have made a beeline for listing on the SME exchange of the BSE.
At present, 94 companies are listed on the SME bourse and about 32 companies, most of which are located in Gujarat, are in queue to get listed.
“Out of the total 32 companies, which have filed Draft Red Herring Prospectus (DRHP) with BSE SME exchange, 12 are from Gujarat, representing more than 37 per cent of the companies who have made recent filings,” said Mahavir Lunawat, managing director, Pantomath Capital Advisors Private Limited.
Earlier this month, a BSE SME official said the exchange is targeting to list about 100 companies by the end of current financial year.
Recently, BSE SME Exchange had revised the listing norms thereby requiring higher post-issue paid-up capital at Rs 3 crore against the previous requirement of Rs 1 crore. Also, now the net worth requirement and tangible assets requirement has been increased to Rs 3 crore from Rs 1 crore.
Similar platform on the National Stock Exchange (NSE) named Emerge, however, has received lukewarm response from SMEs. So far, only seven companies have been listed on NSE Emerge since its inception.
Commenting on the disparity in listing numbers on the two bourses, B Madhuprasad, chairman of Keynote Corporate Services, said, “Aggressive marketing of SME platform at the ground level is the key strength of BSE SME, which NSE is not doing and because of this, listing is higher on BSE.”
Of the 94 companies listed on SME bourse till date, six have migrated to the main board — BSE Limited. According to the existing norms, companies that have completed two years on the SME platform and have achieved post-issue paid-up capital of Rs 10 crore and above are eligible for migration to the main board.
The market-capitalisation of the BSE SME platform is Rs 7,819 crore, as on June 15. The total market capitalisation of NSE Emerge is Rs 430 crore.
Gaurav Jain, director, Hem Securities Ltd, said, “The SME platform offers a great opportunity to entrepreneurs to create wealth for themselves, for investor community and for expansion and acquisition. It helps SMEs create visibility, strong balance sheet and credibility.”
According to merchant banker Hem Securities, so far 20 companies from engineering, chemicals, industrial machinery, plastic products, renewable energy, textile, gems and jewellery, pharmaceutical, cement and home furnishing sectors have approached them for understanding the process of listing. Entrepreneurs are showing interest on listing on BSE SME exchange and NSE Emerge as the companies listed in past on both these platforms have created wealth for themselves and for their investors.
