BSE Sets New Criteria for SMEs to Migrate to Main Board

BSE Sets New Criteria for SMEs to Migrate to Main Board

VoM News Desk | November 27, 2023 | 12:38 PM IST | Breaking News | Tags: Bombay Stock Exchange, Business Expansion, Financial Criteria, Legal Compliance, Market Capitalization, SEBI Regulations, SME Platform | Follow on Google News

BSE Sets New Criteria for SMEs to Migrate to Main Board

BSE Sets New Criteria for SMEs to Migrate to Main Board

The Bombay Stock Exchange (BSE) has updated its guidelines for small and medium enterprises (SMEs) aiming to transition from the SME platform to the main board. Under the new regulations, an SME is required to have a minimum net worth of ₹15 crore in the two financial years preceding their application for migration. Furthermore, these firms must have been listed on the SME platform for at least three years and maintain a base of 250 public shareholders prior to their shift to the main board.

Financial Health and Market Capital Requirements

To qualify for migration, SMEs must demonstrate financial stability, evidenced by positive operating profits in at least two of the past three financial years and a positive profit after tax (PAT) in the latest financial year. Additionally, the paid-up equity capital of the applicant firm should exceed ₹10 crore, and its market capitalization must be a minimum of ₹25 crore.

Legal and Regulatory Compliance

Applicant firms are also required to have a clean legal and regulatory record. This includes not having any winding-up petitions admitted by the National Company Law Tribunal (NCLT) against them and no significant regulatory actions, such as trading suspensions, in the past three years. Moreover, the firm, its promoters, and subsidiaries should not be barred by the Securities and Exchange Board of India (SEBI).

Implementation Timeline and Historical Context

The new guidelines are set to take effect from January 1, 2024. Since the inception of the BSE SME platform in March 2012, a total of 464 companies have been listed, with 181 of them successfully migrating to the main board. Both the BSE and the National Stock Exchange (NSE) have dedicated platforms for SMEs, designed to facilitate their growth by enabling them to raise equity capital efficiently.

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