Well settled entrepreneur having established business and track record of profit for last 3 years can avail this platform for public finance up to 25 crores for multiplying the growth in very short span at minimum cost of finance without repayment burden. The gist of this mode of finance at glance in tabular form is as follows
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Raising Capital for Projects
Listing provides an opportunity to the company to raise capital to fund new projects / expansions and diversifications. -
Low cost Bank loans
The company listed on the sme exchange get bank loans at a rate lower than normal rate for other entities who are not listed. -
Better debt/equity ratio
Finance cost is reduced due to infusion of more equity resulting into improved profitability on balance sheet. -
Easy exit for investors
Listing provides an easy exit route to the equity investors by allowing meaningful platform for sale of shares in open market. -
Raising Capital for Projects
Listing provides an opportunity to the company to raise capital to fund new projects / expansions and diversifications. -
New avenues for raising further funds
Raising of funds from body of institutional and professional investors by way of preferential , rights issue, Qualified Institutional Placements etc. -
New avenues for growth
Merger/acquisition/takeover for exponential growth are easy for listed company. -
Lower capital gain tax
The sale of listed securities attracts lower rate of STCG and LTCG. -
Easy Migration to Main Platform after 2 years
Companies listed on SME Exchange can migrate to the main Board of Exchange provided prior approval of Exchange is obtained and Resolution is passed by Shareholders post Completion of two years on SME Platform.
Benefits of Listing on the SME Exchange
Eligibility Criteria
BSE
NSE
Post-Issue Paid up Capital
The post-issue paid up capital of the company shall be at least Rs. 1 crores and not exceeding Rs. 25 Crores.
The post issue paid up capital of the company (face value) shall not be more than Rs. 25 Crore.
Net Tangible Assets
Net Tangible assets of at least Rs. 1 crore as per the latest audited financial results
No Requirement
Net worth
Net worth (excluding revaluation reserves) of at least Rs. 1 Crore as per the latest audited financial results
No Requirement
Profit Track Record
Track record of distributable profits in terms of provisions of the companies act,2013 for at least two years out of immediately preceding 3 financial years each of at least 12 months. (Extraordinary income will not be considered for the purpose of calculating distributable profits.) Otherwise, the net worth shall be at least Rs 3 Crores.
The company should have track record of at least 3 years. The company should have positive cash accruals (earnings before depreciation and tax) from operations for at least 2 financial years preceding the application and its net-worth should be positive.
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