SEBI norms for SME listing without IPO issued
Updated: Oct 25, 2013 11:21:38am
Mumbai, Oct 25 (KNN) A corporate entity in the small and medium segment will be eligible for listing on the SME exchanges without IPO if it has not completed a tenure of over 10 years after incorporation and its revenue has not exceed Rs 100 crore in any of the previous financial years, according to the Securities and Exchange Board of India SEBI guidelines for such listings on the Institutional Trading Platform (ITP).
According to the guidelines issued by the stock market regulator, a company aspiring to list on the stock exchange without an IPO should also have got an investment of at least Rs 50 lakh by an alternative investment fund/venture capital fund/ by a merchant banker/or an angel investor or a specialised international multilateral agency, or a public financial institution, among other such investors.
A company can also raise funds through private placement or through a rights issue. However, in case of a rights issue, there would be no option for renunciation of rights. The company seeking to get listed on ITP will have to agree to make required amendments to its Articles of Association, as per the guidelines of SEBI.
The promoters of SMEs will not be able hold less than 20 per cent of the post listing capital of the company and the same would be locked-in for a period of three years from date of listing
These are important guidelines as they pave way for the SMEs and start-up companies to get listed and traded on the stock market without really offering public shares which involve huge expenses and compliance costs.
Even in the early stages of growth, the SMEs and start-ups will be able raise capital from the securities market.
The small industry representatives including the apex Federation of Indian Micro, Small and Medium Enterprises (FISME) have been demanding more avenues for raising the equity capital for the SMEs since they cannot rely too much on debt. (KNN Bureau/PC)
According to the guidelines issued by the stock market regulator, a company aspiring to list on the stock exchange without an IPO should also have got an investment of at least Rs 50 lakh by an alternative investment fund/venture capital fund/ by a merchant banker/or an angel investor or a specialised international multilateral agency, or a public financial institution, among other such investors.
A company can also raise funds through private placement or through a rights issue. However, in case of a rights issue, there would be no option for renunciation of rights. The company seeking to get listed on ITP will have to agree to make required amendments to its Articles of Association, as per the guidelines of SEBI.
The promoters of SMEs will not be able hold less than 20 per cent of the post listing capital of the company and the same would be locked-in for a period of three years from date of listing
These are important guidelines as they pave way for the SMEs and start-up companies to get listed and traded on the stock market without really offering public shares which involve huge expenses and compliance costs.
Even in the early stages of growth, the SMEs and start-ups will be able raise capital from the securities market.
The small industry representatives including the apex Federation of Indian Micro, Small and Medium Enterprises (FISME) have been demanding more avenues for raising the equity capital for the SMEs since they cannot rely too much on debt. (KNN Bureau/PC)
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