Availability of Financing Options for SMEs, Listing and Operations of SME Exchange
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BSE – Home to SME Companies
2702
1326991
0
500
1000
1500
2000
2500
3000
No.
of C
ompa
nies
Less than Rs. 10 Crs Above Rs. 10 Crs < Rs. 25 Crs Rs. 25 Crs and above
3
Financing Options for SMEs
4
Regulatory Framework
Whether there existed a regulatory framework that
allowed SME companies to access public?
5
Different Packaging
No SEBI filing and vetting process, but only with the Exchanges – WOW !!!
Diluted regulatory requirement – No SEBI eligibility criteria No IPO grading Lower no. of minimum allottees Lower continuing listing requirements
Opportunity available for migrating to main board
6
Providing Safeguards
Participation only by investors willing to invest minimum of Rs. 1 lac
Mandatory market making for a period of 3 years from date of listing
100% underwriting
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BSE Eligibility criteria
Net Tangible Asset of atleast Rs. 1 crore Net worth of atleast Rs. 1 crore Minimum post issue paid up capital of Rs. 1 crore Track record of distributable profits in 2 out of 3
preceding financial years
OR
Minimum Net worth of Rs. 3 crores
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BSE’s Endeavour to encourage this segment
Extensive awareness programs across India with various industry chambers, professional bodies etc.
Dedicated website www.bsesme.com Research report coverage on companies listed on
SME Lower costs of listing
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SME’s apprehensions
Lack of familiarity of capital markets Family owned structures and fear of losing control Costs and fulfillment of regulatory requirements
during and after IPO Lack of investors and existing uncertainties
surrounding success of offering after paying initial costs
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Statistics
Details SME Market
Number of Listed Companies 8
Market Capitalization (Rs. Crores) 171.02
Daily Average Turnover for Sept 2012 (Rs Crores) 0.59
Sectors Number of issuers
Market capitalization(Rs Cr – Sept 2012)
Finance 4 70.54Capital Goods 1 52.02Healthcare 1 25.50Information Technology 1 14.97Miscellaneous 1 7.99
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Issue Costs as per offer document
Issue Costs Rs. In lacs % of issue cost
Payment to Merchant Banker including fees and reimbursements of selling commissions brokerages, payment to other intermediaries such as legal advisors, registrars, bankers etc and out of pocket expenses
36.98 63.96
Advertising and marketing expenses 5.00 8.65Printing and Stationery (incl. distribution) 7.50 12.97Other (Regulatory fees and other expenses)
8.34 14.43
Total 57.83 100.00
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