In a game-changing move, the Bombay Stock Exchange (BSE) has rolled out updated guidelines for small and medium enterprises (SMEs) eyeing a transition from the SME platform to the main board. Effective January 1, 2024, these guidelines set the stage for a more robust and transparent listing process.
Key Requirements for Transition:
- Net Worth Criterion:Applicants must demonstrate a net worth of at least Rs 15 crore for the preceding two financial years.
- Minimum Listing Period:The applicant firm should have been listed on the SME platform for a minimum of three years.
- Public Shareholders:A minimum of 250 public shareholders is required before moving to the main board.
- Financial Performance: The applicant should exhibit positive operating profit for at least two out of three financial years, with a positive profit after tax (PAT) in the immediate financial year of applying for migration.
- Equity Capital and Market Capitalization:The paid-up equity capital must exceed Rs 10 crore, and the market capitalization should be at least Rs 25 crore.
- Regulatory Compliance:The applicant company should not have faced winding-up petitions admitted by the National Company Law Tribunal (NCLT). Additionally, no material regulatory action should have been taken against the firm in the past three years.
- SEBI Debarment:The applicant company, its promoters, and its subsidiary should not be debarred by the capital markets regulator SEBI.
The BSE SME platform currently hosts 464 companies, with 181 successfully transitioning to the main board since its inception in March 2012. This joint initiative by BSE and the National Stock Exchange (NSE) aims to empower SMEs to raise equity capital for growth in a cost-effective manner.
The updated guidelines will come into effect from January 1, 2024.
IPPC GROUP: Your Trusted Financial Strategy Partner
Navigating these transitions demands strategic financial planning and compliance. At IPPC Group, we stand committed to assisting businesses in meeting these criteria seamlessly. As SMEs ponder a move to the main board, our team ensures sustained financial health and compliance with the latest regulatory norms.