BSE Introduces Guidelines For SMEs Transition To Main Board
BSE has introduced updated guidelines for small and medium enterprises (SMEs) seeking to transition from its SME platform to the main board. According to the new rules, the applicant must have a net worth of at least Rs 15 crore for the preceding two financial years. Additionally, the applicant firm should have been listed on the SME platform for a minimum of three years and must have 250 public shareholders before moving to the main board.
Other requirements include having a positive operating profit for at least two out of three financial years and a positive profit after tax (PAT) in the immediate financial year of applying for migration. The applicant should also have a net worth of at least Rs 15 crore for the two preceding full financial years. The paid-up equity capital of the applicant must exceed Rs 10 crore and the market capitalisation should be at least Rs 25 crore.
Moreover, the applicant company should not have faced any winding-up petition admitted by the National Company Law Tribunal (NCLT) and no material regulatory action should have been taken against the firm in the past three years, such as the suspension of trading against the SME and its promoters by any stock exchange. The applicant company, its promoters and its subsidiary should not be debarred by the capital markets regulator Sebi.
The updated guidelines will be effective from 1 January 2024. As of now, 464 companies have been listed on the BSE SME platform, with 181 having migrated to the main board, according to data from the platform. BSE and the National Stock Exchange (NSE) launched dedicated platforms for SMEs in March 2012 to facilitate the listing of these firms and help them raise equity capital for growth and expansion in a cost-effective manner.
