How to list a Company in BSE, BSE listing requirements, SME listing criteria, BSE SME listing criteria, procedure for listing a company in stock exchange, BSE SME exchange listing requirements, benefits of BSE listing, Ebizfiling

How to List a Company in BSE (Bombay Stock Exchange)? And other BSE Listing Requirements

The Bombay Stock Exchange (BSE) established the BSE SME Exchange to give a platform for Small and Medium-Sized Enterprises (SMEs) to raise equity financing for their growth and expansion. In this article information such as SME listing criteria, BSE SME listing criteria, BSE listing requirements, the procedure for listing a Company in the Stock Exchange, BSE SME exchange listing requirements, and benefits of BSE listing will be included. Let’s have quick look at BSE (Bombay Stock Exchange) before moving through the procedure of Listing a Company in BSE.

 

About BSE (Bombay Stock Exchange)

BSE Limited, popularly known as the Bombay Stock Exchange, is a Stock Exchange in Mumbai, India. It is located on Dalal Street. It is Asia’s and the world’s tenth oldest Stock Exchange. The BSE SME Exchange was created to allow entrepreneurs to raise equity financing for the growth and expansion of their businesses.

 

Despite the benefits of Public Listing, SMEs have been unable to access capital markets through stock exchanges due to a variety of causes including rigorous regulatory compliances, transparency and financial requirements, and so on. In March 2012, the Bombay Stock Exchange (BSE) established the BSE SME Exchange to give Small and Medium-Sized Enterprises (SMEs) with a platform for acquiring equity financing for their growth and expansion.

Listing requirements for BSE SME Exchange

  • According to the most recent audited financial reports, the SME’s Net Tangible Assets must be at least INR 1 crore.
  • Small and Medium-Sized Enterprise (SME), must be a Limited Company.
  • According to the most recent audited financial accounts, net worth (excluding revaluation reserve) must be at least INR 1 crore.
  • A post-issue face value capital of INR 1 crore to INR 25 crores is required of the issuer or SME. Entities with a post-issue face value of more than INR 25 crores are required to list on the BSE’s Main Board.
  • The corporation must make DEMAT securities trading mandatory and sign into agreements with both the Central Depository Services Limited and the National Securities Depository Limited.
  • A company must have its own website.
  • Before the Board for Industrial and Financial Reconstruction, the company should not have any references (BIFR).
  • A winding-up petition that has been accepted by a court should not be filed by the corporation.
  • The issue must be fully underwritten from the start. Merchant bankers are required to underwrite 15% of their own accounts.
  • For a minimum of three years, the issue’s Merchant Banker is responsible for market-making through a stockbroker who is registered as a market maker with the SME Exchange.
  • When a firm becomes public, it must have a minimum of 50 investors.

Advantages of Listing in BSE (Bombay Stock Exchange)

  • The prices are determined publicly based on demand and supply; stock exchange quotations are generally reflective of the security’s true value. As a result, listing aids in the market’s independent valuation of the company.
  • Corporates and entrepreneurs can use a stock exchange listing to generate funds for new projects, expansions, diversifications, and acquisitions. Employees with ESOPs have access to liquidity as well as an exit mechanism for private equity investors.
  • Transactions in listed securities must be conducted according to the exchange’s regulations and bye-laws. The stock exchanges regulatory measures monitor all securities transactions, avoiding unfair trade practices. It gives small investors more confidence and protects them.
  • Listed companies gain status and importance as a result of the increased liquidity and ready marketability of their securities.

The procedure for listing on the BSE (Bombay Stock Exchange) SME Exchange

  • For the listing on the BSE SME exchange, the issuer Company must consult and appoint a Merchant Banker in an advising position.
  • The Merchant Banker would next perform due diligence on the Company, which would include reviewing all material contracts, financial papers, government approvals, and promoter information, among other things, and preparing documentation for the IPO (Initial Public Offering). The Merchant Banker’s planning and paperwork must include the IPO structure, financial requirements, and share issuances.
  • Following the completion of the Merchant Banker’s due diligence and documentation, the draught prospectus and DRHP are submitted to the Exchange in accordance with SEBI procedures.
  • BSE checks and processes the documents after they are submitted with the relevant application and paperwork. The BSE Exchange Officials also pay a visit to the company’s headquarters. Following the site visit, the Promoters are invited to meet with the Listing Advisory Committee for an interview.
  • BSE grants an in-principle approval on the Committee’s recommendation following a successful site visit and interview by BSE personnel, providing the issuing Company meets all of the requirements. The Merchant Banker would file the Prospectus with the ROC after receiving in-principle approval, detailing the issue’s opening and closing dates. After receiving ROC permission, they notify the Exchange of the issue’s opening dates as well as the required papers.

Required Documents for Listing in BSE Stock Market

  • Copies of the offer’s draught document
  • MOA and AOA of a Company
  • Copy of the resolution passed by the shareholders under section 62(1)(c) of the Companies Act, 2013.
  • Balance Sheets, Profit & Loss Accounts, and Cash Flow Statements
  • PAN and TAN details of a company
  • PAN and DIN of directors and promoters
  • A copy of the Board of Directors’ resolution authorizing the issuance of securities
  • Other documents, as needed, are required on a regular basis.

Conclusion

The Bombay Stock Exchange (BSE) established the BSE SME Exchange to give a platform for Small and Medium-Sized Enterprises (SMEs) to raise equity financing for their growth and expansion. SMEs are the lifeblood of a country’s economy, and India’s SMEs employ 70 million people through 30 million businesses. The Prime Minister’s Task Force advocated the establishment of a specialized Stock Exchange for SMEs in 2010, and SEBI put out the rules for SME Exchange governance. Based on the foregoing, the BSE SME Exchange was created to allow entrepreneurs to raise equity capital for the growth and expansion of their businesses.

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Author: zarana-mehta

Zarana Mehta is an MBA in Finance from Gujarat Technology University. Though having a masters degree in Business Administration, her upbeat and optimistic approach for changes led her to pursue her passion i.e. Creative writing. She is currently working as Content Writer at Ebizfiling.

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