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INTRODUCTION

BSE (Bombay stock exchange) has set up the platform for startups as per the norms placed by SEBI. This platform offers an entrepreneur and investor friendly atmosphere which permits the listing to all startup dispersed throughout the india from unorganized sector into a structured sector. The startup listing platform has been launched by the BSE in 2018 December with the aim to allow deserving startup to raise capital from the market.


DESCRIPTION

BSE already listed startups will support small medium enterprise to raise equity capital for their growth and development and accordingly help them to bloom into full fledged companies. They have also the option to migrate to main board of listing according to the set of norms. BSE Startups will deliver immense opportunities to entrepreneurs, to raise capital in cost effective manner and simultaneously provide opportunity to investors to choose the best company and invest at early stage so that maximum return can be yield.

The startup establishments who want to list on BSE startup platform should be deal in prescribed sectors. They must belong to IT and Nano technologies sector, bio-technology and space technology, and others are 3d printing, life sciences, e-commerce, artificial intelligence etc. For listing on the BSE start-up platform, the start-up must be registered with MSME/DIPP with minimum paid-up capital of ₹1 crore. The company must be in functioning for a minimum of 2 years before the date of filing of listing application. They must have positive net worth among other monetary standards. Maximum paid up capital of company would be ₹ 25 crore after issue has made. The post issue paid-up capital (face value) of the company shall not be more than ₹25 crore.

BSE Exchange Platform for SME?

The utmost difficult phase of commencing a new business is not having an idea or plan for its execution but the fund raising is most tough job for it. Getting reliable investors with enough capital for business is quite difficult. Maximum job creation in india came from SME (around total 30 million) sector as they share nearly employment to minimum 70 million people. Nowadays SME became the backbone of indian economy and thus the Bombay stock exchange has provide an option to small and medium sized enterprises to list at BSE SME Exchange platform for raising equity capital for expansion of trade. Prime minister’s task force suggested to set up a platform at dedicated stock exchange for SMEs and SEBI will help them in raising funds for the growth and enlargement of their businesses. One more advantage of this startup platform is that, startup can list on them and launch the initial public offerings even they have no profitable business.


Benefits of listing:

Listing provides an exclusive opportunity to securities of company in the stock exchange. Recorded shares have only right to be traded on the stock exchange. Stock exchange enables transparency in all the transactions made in listed securities. The important advantages of listing are listed below,


Raising funds: First company must list their securities to stock exchange and after that they can raise capital from public for the specified purpose like having new project, want an expansion and diversification in company and others.


Corporate practice must be good: If there is no compliance of listing agreement that made between corporate and stock exchange, exchange have right to delist or suspend the securities from the rings of the exchange. So it’s better for the listed companies to follow the fair practice just to get benefits of exchange.


Liquidity in security: Listed securities easily bring liquidity or marketability between the share prices as there is continuous trading between them and it’s beneficial for the corporates and investors.


Beneficial for the public : The data maintained by stock exchange server in the form of price quotations and others, helps to provide valuable information to the public which can be used for research study. Before making investment, financial institutions, or other individual investor whether NRI or domestic can take wise decisions before making investments. It also helps to make proper due diligence of company.



Valuation of fair price : Stock exchange reflects the real value of securities. When the securities arrives the public, their prices can be changed as per the basis of demand and supply but when it comes to stock exchange, other factors are also consider to get the real price of a single security. Thus listing helps to make the independent valuation of the business by the market.


Disclosure of business information timely :At the time of signing the listing agreement with the exchange, it creates the responsibility on company is to disclose all important information relates with them like issue of bonus shares, dividend, about right shares and other material information. By providing the information to exchange, share price start fluctuating and bringing the transparency and help to build confidence among investors.

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FAQ's

Facilitator for SME companies to scale new heights

  • Define small medium exchange (SME) platform?

    The SME platform of the stock exchange is made for minor and average sized businesses having great growth and evolution potential. This platform of the exchange will be open for those small industries whose paid up capital after issuing the shares would not be more than Rupee twenty five crores.

  • Define small medium exchange trading?

    A SME exchange is dedicated stock exchange for listing or trading the securities issued by small and medium scale enterprises (SMEs) who face it challenging to get listed their shares in the main board. SME are allowed to raise capital for growth of business in form of equity from the stock exchange platform dedicatedly for SME.

  • What is the meaning of SME IPO?

    Small and medium enterprise BSE exchange is a platform for trading shares especially for SME. For listing the shares on platform, company need to came with initial public offer (IPO).

  • How IPO differ from SME IPO?

    Regular IPO must have a paid up capital of at least Rs 10 crores whereas in circumstance of small medium enterprise IPO, the maximum value should be Rs 25 crores. When we talk about member, minimum allotee for normal IPO must be 100 people but in case of SME, it would be 50.

  • Why SME is significant in indian economy?

    Nowadays, SME become a very important for our economy. They are the main source of job creation in today’s scenario. These enterprises also contribute to GDP growth and also ensure the proper flow of money in the economy.

  • What are the challenges faced by startups while listing on exchange?

    The biggest challenges for startup at the time of listing on SME exchange is being a startup itself. Startup faced a lot of problem in growth, development along with fund raising. Only listing at exchanges cannot ensure the success. Many startup has lack of experience, infrastructure, capabilities to comply the all listing process.

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