Are you an SME? Know if you are eligible to go public on SME platforms of BSE & NSE

Are you an SME? Know Eligibility

SME Platforms facilitated by BSE and NSE are the best way for the small and medium sized companies to go public and list on the stock exchanges. These platforms which have specially designed for small and medium enterprises are the major contributors to SMEs who want to make it big. However, if an SME want to go for an IPO on stock exchange’s SME platform, the eligibility criteria laid down should be satisfied. This varies from NSE to BSE. Now check out Are you an SME? Know Eligibility from below….

Are you an SME? Know Eligibility

Are you an SME? Know Eligibility

NSE EMERGE – Eligibility criteria:

Below are the list of credentials that have to be complied with as on the date of filing the IPO documents with the stock exchange and other concerned authorities:

SL Specification Criterion
1 Form of Incorporation The applicant should be a company registered as per the companies act 1953/2013.
2 Paid up capital of the company post issue The maximum paid up capital (face value) subsequent to the IPO should not exceed Rs. 25 crores.
3 Past performance The applicant should have positive cash accruals i.e. earnings before depreciation and tax from operations for at least 2 financial years preceding the year of application and its net-worth should be positive.
4 3 years track record Submission of details of track record of at least three years of any of the following as the case stands.

  • The applicant seeking listing or
  • The promoters or promoting company, incorporated in or outside India or
  • Partnership firm and subsequently converted into a Company before listing (not in existence as a Company for three years) and approaches the Exchange for listing.
5 Other conditions
  • The applicant has never been referred to Board for Industrial and Financial Reconstruction (BIFR).
  • No petition for winding up has been admitted by a Court of competent jurisdiction against the applicant entity.
  • No material regulatory or disciplinary action initiated by a stock exchange or regulatory authority in the past three years against the applicant company.
6 Disclosures to be made in the offer document Disciplinary action during past 1 year:

Any material regulatory or disciplinary action taken by a stock exchange or regulatory authority during the past one year in respect of promoters/promoting company, group companies, companies promoted by the promoters/promoting company of the applicant company.

Default in repaying interest/principal:

Details of any defaults made in respect of payment of interest and/or principal to the debenture/bond/fixed deposit holders, banks, FIs by the applicant, promoters/promoting company, group companies, companies promoted by the promoters/promoting company during the past three years

Litigation records:

‘Litigation record, the nature of litigation, and status of litigation’ of the applicant, promoters/promoting company, group companies, companies promoted by the promoters/promoting company

Criminal history if any:

In respect of the track record of the directors, the status of criminal cases filed or nature of the investigation being undertaken with regard to alleged commission of any offence by any of its directors and its effect on the business of the company, where all or any of the directors of issuer have or has been charge-sheeted with serious crimes like murder, rape, forgery, economic offences etc.

BSE SME – Eligibility criteria:

SL Specification Criterion
1 Incorporation The applicant should be a company registered as per the companies act 1953/2013.
2 Paid up capital of the company post issue The paid up capital of the company shall be at least Rs.3 crore subsequent to the issue.
3 Net worth Net worth of the company should be at least Rs.3 crore as per the latest audited financial results. Revaluation reserves should be while computing the net worth.
4 Tangible assets Net Tangible Assets  of the applicant should be at least Rs.3 crore as per the latest audited financial results
5 Past Track record There should have been distributable profits in terms of Section 123 of the Companies Act 2013 for at least two years out of immediately preceding three financial years.

Or

The net worth shall be at least Rs.5 crores

6 Other requisites
  • The applicant company should have a website
  • The company should facilitate trading in demat form and enter into an agreement with both the depositories i.e. NSDL & CDSL.
  • There should not be any change in the promoters of the applicant company in preceding one year from date of filing the application to BSE for listing under SME segment.
7 Disclosures in the offer documents
  • The applicant has never been referred to Board for Industrial and Financial Reconstruction (BIFR).
  • No petition for winding up has been admitted by a Court of competent jurisdiction against the applicant entity.

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