<p>There is a huge untapped potential in the small and medium enterprises (SMEs) sector in India to mop up funds from the market and list on bourses.
Almost a million SMEs of the estimated 2.6 million SMEs in India have the potential to list in coming years, Bombay Stock Exchange (BSE) SME Exchange CEO Lakshman Gugulothu told Business Standard.
BSE SME Exchange is likely to become operational soon and is awaiting the final nod of Securities and Exchange Board of India (SEBI).
“There is a general lack of awareness among SMEs about equity capital, stock market and funding operations other than banks. They need to be addressed. Today, banks are able to meet only about one-fourth of their funding requirements,” he noted.
Gugulothu said the potential was huge for SME listing on SME Exchange and trading volumes would depend upon the education and awareness of SME promoters.
As a prelude to SME Exchange launch, BSE has undertaken a multi-pronged activity to create awareness about the likely benefits that would accrue to SMEs on listing.
The basic criteria of listing on the bourse would be minimum 50 investors and Rs 50 lakh post Initial Public Offer (IPO) paid-up capital.
For companies with Rs 50 lakh to Rs 10 crore paid up capital, the listing would be compulsory, while for companies with paid up capital between Rs 10 crore to Rs 25 crore, it would be optional for listing on either the SME Exchange or the main board.
“Currently, there are about 1,500 companies with paid up capital of between Rs 3 crore to Rs 10 crore and 2,500 companies with paid up capital of between Rs 10 crore to Rs 25 crore, that fulfil the eligibility criteria of listing on the new exchange,” he informed.
Such companies belong to a spectrum of sectors, including manufacturing, services, textiles, pharmaceuticals, agro-based, original equipment manufacturers (OEMs), Information Technology etc.
“We have relaxed norms for SMEs desirous of listing with us, including waiving of 3 year profit making criteria of main board. The listing process has been simplified and SEBI involvement has been made minimal,” he said.
Commenting on Uttar Pradesh, Gugulothu said BSE was focusing on major SME clusters, including Lucknow, Kanpur, Meerut, Moradabad, Agra, Mathura, Noida etc. UP has a large number of SMEs estimated at over 1.2 million.
BSE is mobilising SMEs and holding seminars in consort with industry chambers, associations and trade bodies.