SEBI mulling new trading platform for SME start-ups
Updated: Apr 12, 2013 02:11:59pm
New Delhi, Apr 12 (KNN) After a poor response to the launch of a separate Small and Medium Enterprises (SME) trading platform, market regulator Securities and Exchange Board of India (SEBI) is now working on a proposal which will enable start-up companies to access capital without the expensive IPO route.
The proposed platform, unlike the one for SMEs, will also allow start-ups to list without IPOs (Initial Public Offering), SEBI Executive Director Sivasubramanian Ramann was quoted by media reports.
Sharing SEBI’s concern over dismal interest in the newly launched SME exchanges on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), the industry body the Federation of Indian Micro, Small and Medium Enterprises (FISME) has suggested to the market regulator that listing of the small and medium sized companies be permitted on these platforms without offering shares to the public in the initial stage.
Making this recommendation at the recent meeting of the SEBI committee on SME Exchange, Past President of FISME VK Agarwal said, “The creation of such a platform would help both the institutional investors and the companies seeking to raise funds without being required to tap the expensive IPO route.”
He said such an idea was also mooted in the Budget speech of the Finance Minister P Chidambaram.
Besides FISME, representatives of the venture capital funds, angel fund associations, law firms, merchant bankers, Ministry of Finance and financial consultancy organisations are also members of the SEBI appointed committee of the SME exchange.
While the trading platforms for the SMEs were launched both on BSE and NSE with a lot of enthusiasm, the concept of the listing and trading of the small and medium scale companies has not really taken off.
SEBI and the government along with the FISME are concerned over the lack of response to the SMEs.
Agarwal said, once the SMEs are allowed to list and trade on these specialized exchanges among the institutional investors, “over time they will be able to attract investors and obtain equity.”
On the regulations for the alternate platform, he said relaxations need not be offered as sops to list on the exchanges. On the other hand the guidelines should be designed to lead to greater transparency and good corporate governance as appropriate to smaller companies coming up for listing.
“The overall objective should be to win investor confidence and provide comfort to the market, which in turn will lead to good companies getting attracted to list themselves. This will result in the eventual success of the SME exchanges,” the FISME immediate past President said.
To an observation that the exchanges should frame listing guidelines which restrict failures to minimum, Agarwal commented that failures due to genuine business reasons will not bring bad name. It is only the failure through unethical and fraudulent practices which bring disrepute to the system.
He also proposed that an e-platform be created in SME exchanges wherein the listed companies will have to put out minimum prescribed information with regard to their affairs. (KNN)
The proposed platform, unlike the one for SMEs, will also allow start-ups to list without IPOs (Initial Public Offering), SEBI Executive Director Sivasubramanian Ramann was quoted by media reports.
Sharing SEBI’s concern over dismal interest in the newly launched SME exchanges on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), the industry body the Federation of Indian Micro, Small and Medium Enterprises (FISME) has suggested to the market regulator that listing of the small and medium sized companies be permitted on these platforms without offering shares to the public in the initial stage.
Making this recommendation at the recent meeting of the SEBI committee on SME Exchange, Past President of FISME VK Agarwal said, “The creation of such a platform would help both the institutional investors and the companies seeking to raise funds without being required to tap the expensive IPO route.”
He said such an idea was also mooted in the Budget speech of the Finance Minister P Chidambaram.
Besides FISME, representatives of the venture capital funds, angel fund associations, law firms, merchant bankers, Ministry of Finance and financial consultancy organisations are also members of the SEBI appointed committee of the SME exchange.
While the trading platforms for the SMEs were launched both on BSE and NSE with a lot of enthusiasm, the concept of the listing and trading of the small and medium scale companies has not really taken off.
SEBI and the government along with the FISME are concerned over the lack of response to the SMEs.
Agarwal said, once the SMEs are allowed to list and trade on these specialized exchanges among the institutional investors, “over time they will be able to attract investors and obtain equity.”
On the regulations for the alternate platform, he said relaxations need not be offered as sops to list on the exchanges. On the other hand the guidelines should be designed to lead to greater transparency and good corporate governance as appropriate to smaller companies coming up for listing.
“The overall objective should be to win investor confidence and provide comfort to the market, which in turn will lead to good companies getting attracted to list themselves. This will result in the eventual success of the SME exchanges,” the FISME immediate past President said.
To an observation that the exchanges should frame listing guidelines which restrict failures to minimum, Agarwal commented that failures due to genuine business reasons will not bring bad name. It is only the failure through unethical and fraudulent practices which bring disrepute to the system.
He also proposed that an e-platform be created in SME exchanges wherein the listed companies will have to put out minimum prescribed information with regard to their affairs. (KNN)
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