Finally the Bombay Stock Exchange received approval from the Securities and Exchange Board of India for its proposed SME (Small and Medium Enterprise) Exchange.
The BSE applied for permission for an SME Exchange in July 2010, and the final approval from SEBI came after 1year after studying all the aspects of SME Exchange.
The SME Exchange will now start receiving the offer documents from the merchant bankers for companies wishing to list on the exchange platform.
The CEO, BSE SME Exchange Mr. Laxman Gugulothu said that many companies already approached them and among these about 30-40 percent were very serious about getting listed on the SME Exchange.
He added that " Of the 70-80 who have approached us on the web site, 15-20 are very serious. Apart from these, 50 other companies have shown an interest in our exchange. Of these 50, around 25 have filed a mandate with merchant bankers"
The National Stock Exchange also waiting for the final approval from the SEBI for its SME Exchange.
For any company to get listed on an exchange, the company has first to file a draft RHP prospectus with SEBI. It then needs in-principle approval from both SEBI and the exchanges. This is followed by a one-month notification to the public.
This has been done away with for companies proposing to list on SME Exchange. An SME needs to only submit the offer documents and on receiving the exchange's approval alone can enter the capital market.
The only criteria for the SMEs to qualify the listing is that the promoter share holding to be diluted has to amount to a minimum of Rs. 25 crore. That is at a face value of Rs. 10 per share, the total number of shares on offer should be 2.5 crore. (2.5 crore * 10 = 25 crore)
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