SME IPO – BSE’s SME Exchange and NSE’s Emerge. Check out SMEs – Advantages in going public. Check out Details for Various Types of SME IPOs in Detailed.
Small and medium enterprises (SME):Micro, Small and Medium Enterprises development act (MSMED) 2006 defined small and medium enterprises (SME) as follows:
|Type||Investment in plant and machinery excluding land and building for enterprises engaged in manufacturing||Investment in plant and machinery excluding land and building for enterprises engaged in providing services|
|Small||More than Rs. 25 lakhs but does not exceed Rs. 5 crores.||More than Rs. 10 lakhs but does not exceed Rs.2 crores|
|Medium||More than Rs.5 crores but does not exceed Rs.10 crores lakhs||More than Rs.2 crores but does not exceed Rs.5 crores|
SME IPO:In order to facilitate the SMEs with the opportunity to raise funds from the investors in stock market, a separate platform has been designed and implemented by BSE and NSE. SMEs will come up on to these platforms with initial public offers offering their shares to the wide range of investors.
BSE SME:The platform operated by Bombay stock exchange for SME to raise funds in stock market is called as BSE SME. It is the 1st SME Exchange in the country to get approval of the stock exchange regulator SEBI. BSE SME enables the listing of SMEs from the unorganized sector into a regulated and organized sector.
NSE EMERGE:The platform operated by National stock exchange exclusively for the SMEs to raise funds through equity in the stock market is called as NSE EMERGE. The main focus is to bring together the potential investors and emerging corporates so that the businesses produce their best along with maximizing the investor’s wealth.
SMEs – Advantages in going public:
1. Wider access to capital:
2. High visibility in the industry:Listed companies enjoy greater credibility and legal compliance. They will become known to wider section of the investors. This gives the companies an opportunity to penetrate into the existing market while creating base in the new arenas.
3. Tax benefits to the shareholders:
Listed securities are always advantageous in the events of sale. In case of sale of listed securities Short Term Gains Tax is charged at 15% and no question of Long Term Capital Gains Tax if it is a long term capital asset.
4. Enhanced liquidity to the shareholders:In the stock market how easily can a share be sold decides whether that share has more market liquidity or not. Listed securities enjoy more liquidity than the unlisted bunch.
5. Enhanced market value:
- What is listing and its Importance
- Pre – Open session of Stock markets NSE & BSE
- Various ways to minimize loss in share trading
- Is Stamp duty to be made on Share Certificate?
- Transfer of Shares in case of Death of the Holder
- What is short selling?
- IPO (Initial public offer)
- Are you an SME? Know Eligibility