Can suspended companies be allowed to get listed on SME Exchange?
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SME Exchange is allocated for SMEs who otherwise find it difficult to trade their securities and shares. Initially, the SMEs found it difficult to involve themselves in satisfactory trading volumes while they were listed along with other stocks. Thus, SME Exchange became the well-known stock exchange approved by SEBI for the listing of securities.
For any organisation to be listed on the SME Exchange, its post-issue paid-up capital should not exceed ₹25 crores. The SME Exchange does not limit itself to the various SMEs as described by The Micro, Small and Medium Enterprise Development Act 2006 or the organisations where the finances allotted for plant and machinery does not exceed ₹10 crores.
Thus, the various organisations with paid-up capital between ₹10 to 25 crores have this option to migrate from Main Board (i.e. The National Stock Exchange) to the SME Exchange and vice versa.
Process for migrating to BSE SME Platform
The various organisations that are listed with identified stock exchanges and are looking for listing themselves on BSE SME Platform are required to satisfy the following norms:
| PARTICULARS | NORMS |
|---|---|
| Paid-up capital | Minimum of Rs.1 crore and maximum up to Rs. 25 crores, as on the date of making an application for the direct listing. As per the latest audited financial results, Net worth must be positive & Net tangible assets of Rs. 3 Crores. |
| Networth | |
| Track record | The company or the partnership/ proprietorship/LLP firm or the firm which have been converted into the company should have a combined track record of at least 3 years. In case a Company/Partnership/ Proprietorship/LLP has not completed its operation for three years then should have been funded by way of loan/equity by Banks or Financial Institutions or Central or State Government or its undertaking, or its Group Company should have been listed for at least two years either on the Main Board or SME Board of the Nationwide Exchange. |
| Public Shareholding | It is a mandate to comply with the requirements of SCRA, SCRR as well as the Listing Agreement. |
| No. of public shareholders | Minimum 50 |
| Migration | The organisations have an option to make a fresh application in order to migrate to the main board only after a period of two years from the date of listing on SME Platform, but it has to fulfil the norms of Direct Listing on the Main Board |
| Appointment of Market Maker |
|
Along with the above-mentioned norms, an organisation at the time of taking shareholders permission before migrating to SME Exchange has to follow the below-mentioned pointers:
- Clearly indicate to the shareholders’ that once the migration procedure is complete, the equity shares held by them might multiply and thus, they would be able to offload the same during the market making period.
- The shareholders’ permission is a mandate that needs to be fulfilled and their approval for delisting the securities from the recognized exchanges is required.
Conclusion
Any suspended company is not at all permitted for listing on BSE SME Exchange until the suspension is quashed and the company is again granted permission to trade on the Main Board of BSE.
For further details about SME IPO India and SME, IPO Eligibility contact our SME IPO Consultant at www.muds.co.in
“The withdrawal of Jaiprakash Power Ventures insolvency application is a positive outcome which should be applauded as standing up to the established purpose of IBC. Even more, it shall be beneficial for all stakeholders in the long run.”
-Shweta Gupta, Founder and CEO, MUDS