BSE tightens SME migration rules, new listing criteria for Main Board
The Bombay Stock Exchange (BSE), Asia's oldest recognised exchange with over 150 years of history, has significantly strengthened its framework for Small and Medium Enterprise (SME) companies seeking migration to the Main Board and for direct listings.
New Delhi: Stock exchange BSE has strengthened the framework for migration of SME companies seeking migration to Main Board and for companies listed on other recognised stock exchanges seeking direct listing on exchange(s).
The BSE backed its move saying that its latest move is aimed at "promoting transparency, disclosure and thereby improving the quality of listings."
The benchmark index said it is committed to take steps with an aim to strengthen its regulatory framework to enhance market integrity, investor confidence and economic growth.
"As part of change, for migration of SME/direct listing on Mainboard, the exchange has enhanced the requirement of operating profitability to Rs 15 crores for last 3 financial years with minimum operating profit of Rs 10 crores in each of these financial years; as against the previous criteria of positive operating profit for at least 2 out of 3 financial years. Similarly, the minimum number public shareholders have been increased from Rs 250 to Rs 1000,” BSE said in its statement.
The BSE guidelines mentioned that the companies planning to get listed on the mainboard through migration or direct listing will be required to have recorded trading of at least 5 per cent of the weighted average number of equity shares listed during the past six months and have been trading on at least 80 per cent of days during such six-month period.
Eligibility criteria for SME companies
Paid up capital: Atleast Rs 10 crore
- Market Capitalisation:
- Average of 6 months market cap
- Migration: Rs 100 crore
- Direct listing: Rs 1000 crore
Note: For the purpose of calculating the average market cap, the aggregate of daily market cap on the days the scrip has traded, shall be divided by the total no. of trading days during the said 6 months period.
Market Liquidity
- At least 5% of the weighted average number of equity shares listed should have been traded during such six months’ period.
- Trading on atleast 80% of days during such 6 months period.
- Minimum average daily turnover of Rs 10 lacs and minimum daily turnover of Rs 5 lacs during the 6 month period.
- Minimum Average no. of daily trades of 50 and minimum daily trades of 25 during the said 6 months period.
Promoter holding
At least 20% at the time of making an application. For this purpose, shareholding of promoter groups may also be considered for any shortfall in meeting the said requirement.
Lock In of promoter/promoter group shares
6 months from the date of listing on the BSE.