The Bombay Stock Exchange (BSE) launched its SME platform to offer small-and-medium enterprises in India a direct pathway to public market capital. Listing on the BSE SME platform helps companies raise equity, establish corporate credibility, and provide liquidity for early shareholders.
This BSE SME listing guide details the primary BSE SME listing requirements you need to satisfy before preparing your application.
1. Financial Eligibility Requirements
To qualify for listing on the BSE SME platform, a company must meet the following financial parameters:
- Post-Issue Paid-Up Capital: The post-issue paid-up capital of the company must not exceed ₹25 Crores.
- Net Tangible Assets: The company must have net tangible assets of at least ₹3 Crores in the latest audited fiscal year.
- Net Worth: Net worth (excluding revaluation reserves) must be at least ₹3 Crores.
- Profit Track Record: The company must show positive operating profit (EBITDA) in at least two of the three preceding fiscal years.
2. Core Listing Rules & Mandates
Beyond financial numbers, several transaction regulations apply:
- 100% Underwriting: The IPO issue must be 100% underwritten by the appointed merchant banker. The merchant banker itself must underwrite at least 15% of the issue size.
- Peer-Reviewed Auditor: The financial records must be audited and signed by a chartered accountant with a valid ICAI peer-review certificate.
- Minimum Trading Lot: Shares on the SME platform are traded in fixed lots (usually between ₹1,00,000 to ₹2,000,000 in value) to filter retail participation.
- Minimum IPO Subscribers: The IPO must attract a minimum of 50 distinct investors/subscribers before listing approval is granted.
3. Step-by-Step Listing Workflow
- Appoint Advisors: Onboard a SEBI-registered merchant banker, legal counsel, registrar, and peer-reviewed auditor.
- Draft Prospectus (DRHP): Collate all corporate documents, financial histories, and material contracts to draft the prospectus.
- File with Exchange: Submit the DRHP to the Bombay Stock Exchange (BSE) for verification and public review.
- Exchange Site Visit & Interview: Exchange officials conduct a site visit of your facilities and interview the promoters.
- Receive Approval (In-Principle): Address any queries and secure the exchange's in-principle listing approval.
- File Final Prospectus (RHP): Submit the revised prospectus to the Registrar of Companies (RoC) and launch the IPO bid.