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SME LISTING
 
Stock Exchange
Direct Listing on BSE SME Platform

In order to offer the added benefits of SME platforms to the companies already listed on the Main Board, SEBI in association with BSE has laid down the provisions for direct listing. The scheme has been made applicable to only those companies, whose post-issue face value capital is less than INR 25 Crore. Besides, the following conditions would also need to be satisfied for the same.

Shareholders should approve the such migration by passing a special resolution through postal ballot
The issuer company should fulfill the eligibility criteria for listing laid down by the SME Exchange.

The eligibility criteria's as mentioned in point 2 above are as follows :-

The paid up capital should be a minimum of Rs. 1 crore, and maximum of Rs. 25 crores.

Net worth (excluding revaluation reserve) should be at least Rs. 1 crore.

The issuer should have distributable profits in terms of sec. 205 of Companies act, 1956 for at least 2 out of 3 immediately preceding financial years based on audited financial results with last financial year reporting profit. The extraordinary income shall not be considered for calculating distributable profit.

Provided further that total period of latest 3 Financial Years should comprise a period of at least 36 months, otherwise, the net worth shall be at least Rs 3 Crores as per the latest audited financial results.

The issuer shall be compliant of public shareholding norms under the requirements of SCRA, SCRR, and Listing agreement.

Number of public shareholders should be at least 50.

Minimum of 50% of the public shareholding should be in Demat form.

The issuer should be listed on a recognized stock exchange.

Information Memorandum as provided in Schedule II of Companies Act, 1956 to the extent applicable, as certified by the Company Secretary/ MD of the Company.

Companies can make a fresh application to migrate to main board after a period of two years from the date of listing on SME Platform, provided it fulfills the norms of Direct Listing on the Main Board.

At least one Market Maker shall be appointed for a minimum period of 3 years from the date of listing on SME platform.

The Market Maker shall hold at least 5% of the issued capital of the company on the date of listing of the company on SME platform.

The Company at the time of seeking shareholders' approval for migration to SME Exchange should

Mention in the notice to shareholders the fact that upon migration to SME platform, the equity shares held by them may become odd lot and hence will be able to offload the same in one tranche and only to the Market Maker during the market making period.

Seek the shareholder's approval for delisting the securities from all recognized stock exchanges.

However, the Company shall only upon the grant of an in-principle approval for listing on SME Exchange should complete the process of delisting of its securities from all recognized stock exchanges.

The company shall submit a confirmation from the recognized stock exchange(s) that
 
Entire issued capital of the company is listed on the recognized stock exchange
No investor complaint is pending against the company
The company is in compliance with the provisions of the listing agreement, SEBI Regulations/ Circulars, SCRA and SCRR
The securities proposed to be listed are not under suspension
The company has not been referred to the Board for Industrial and Financial Reconstruction (BIFR)
No winding up petition against the company has been accepted by a court
Where the company or the promoters or the directors are/were debarred or face disciplinary action taken by SEBI or a recognized stock exchange, then a period of at least 3 years has elapsed since the expiry of the debarment period.
Company should have its own website

The above provisions shall not apply to companies that are listed on recognized stock exchange, but seeking listing through further public offering (FPO), in which case, the IPO norms of the exchange shall apply.

Downloads
Direct Listing on BSE SME-I
Direct Listing on BSE SME-II
 
Migration from SME Exchange to Main Board

The companies listed on a SME Exchange and whose post issue face value capital is more than ten crore rupees and upto twenty five crore rupees, may migrate its specified securities to Main Board if its shareholders approve such migration by passing a special resolution through postal ballot and if such issuer fulfils the below mentioned eligibility criteria for listing laid down by the Main Board. Provided that the special resolution shall be acted upon if and only if the votes cast by shareholders other than promoters in favour of the proposal amount to at least two times the number of votes cast by shareholders other than promoter shareholders against the proposal.

Eligibility Criteria Laid down by the Main Board
 
Sr.no Particulars Criteria

1

2

Issued and Paid up capital

Networth

Minimum paid up capital of Rs. 10 crores OR Minimum networth of Rs. 50 crores (excluding revaluation reserves) in 3 immediately preceding financial years
3 Profit making track record

Distributable profits in terms of sec. 205 of Companies Act, 1956 for atleast 3 out of 5 immediately preceding financial years based on audited financial results with the last financial year reporting profit.

Provided that extraordinary income shall not be considered for calculating distributable profit.

Provided further that the total period of latest 3 Financial Years should comprise a period of atleast 36 months.

4 Public Shareholding Meeting with the requirements of SCRA, SCRR and Listing Agreement.
5 No. of public shareholders Minimum 500
6 Trading in Compulsory Demat Minimum of 50% of the public shareholding should be held in demat form.
7 Listing track record with Recognized Stock Exchange Listed on any recognized Stock Exchange
8 Information Memorandum Information Memorandum as provided in Schedule II of Companies Act, 1956 to the extent applicable, as certified by the Company Secretary/ MD of the Company
9 Withdrawal/ Rejection Companies can make a fresh application after a period of 3 months
 

The BSE circular dated 26th Nov 2012 said that the companies have to be mandatorily listed and traded on the SME Platform for a minimum period of two years and only after that they can migrate on to the Main Board as per the guidelines specified by SEBI vide their circular dated 18th May, 2010 and as per the procedures laid down under ICDR guidelines Chapter XB.