By Jitesh Agarwal
The Indian market’s burgeoning landscape witnesses the dynamic participation of Small and Medium Enterprises (SMEs) seeking avenues for growth and expansion through equity capital. Nurtured by the visionary initiatives of the National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE), the NSE Emerge and BSE SME platforms stand as citadels of opportunity, redefining the paradigm of equity capital acquisition for burgeoning companies.
Launched in 2012, these platforms embody a commitment to democratizing access to public markets without the rigours of traditional Initial Public Offerings (IPOs). They serve as conduits, bridging enterprises with investors, and fostering an environment conducive to growth and expansion. Amidst the regulatory frameworks and criteria, these platforms signify a promising avenue, igniting the aspirations of SMEs to soar to new heights in India’s vibrant market scenario.
NSE Emerge
Launched by the National Stock Exchange in 2012, NSE Emerge stands as an inclusive platform tailored for SMEs and startups. It beckons companies with a modest minimum qualification of being incorporated under the Companies Act 1956/2013, allowing them to connect directly with investors for funding without the traditional IPO process.
BSE SME
Aligned with SEBI’s regulations, BSE Ltd introduced the BSE SME Platform in 2012. This platform, while following similar incorporation prerequisites as NSE Emerge, emphasizes a conducive environment for both entrepreneurs and investors. It offers a regulated space for SMEs from diverse sectors scattered across the Indian market to access public funding.
Listing criteria comparison
The listing criteria for both platforms share certain commonalities such as incorporation under the Companies Act, with post-issue paid-up capital not exceeding INR 25 crores. However, distinctions arise in their financial track record requirements. NSE Emerge necessitates a positive EBITDA in two of the last three financial years preceding the application, while BSE SME mandates a net tangible asset of INR 1.5 crores.
Additional requirements
BSE SMEs necessitate a company website as a mandatory condition, underscoring their emphasis on digital presence. Furthermore, it requires no change in promoters within one year preceding the application, ensuring stability and continuity in leadership.
Recent Listings
Recent listings on both platforms showcase impressive subscription rates and substantial premiums during their IPOs, demonstrating the investor community’s interest and confidence in SMEs listed through these avenues.
The initiatives of NSE Emerge and BSE SME epitomize the concerted effort to provide a robust, regulated, and investor-friendly platform for SMEs seeking capital infusion. These platforms serve as catalysts for SMEs, nurturing their growth trajectory by facilitating access to public funding while ensuring compliance with regulatory frameworks.
Summing up
As NSE Emerge and BSE SME platforms continue to evolve, they represent the democratization of capital access, empowering SMEs to navigate the complex terrains of the stock market with ease and regulation. Their emphasis on inclusivity, investor-friendly environments, and adherence to stringent criteria marks a pioneering step toward a more vibrant, diverse, and accessible marketplace.
With each successful listing, these platforms solidify their role as facilitators of entrepreneurship, fostering innovation and expansion across diverse sectors. As SMEs find their footing in these regulated spaces, the NSE Emerge and BSE SME platforms stand as beacons, illuminating the path for aspiring enterprises to thrive and contribute to India’s economic prowess.
(The author is Jitesh Agarwal, Founder, Treelife, and the views expressed in this article are his own)
