BSE raises norms for SME migration to main board to boost listing quality

BSE revises SME migration norms with higher profitability, shareholder, and liquidity requirements to enhance transparency, investor protection, and market integrity

BSE has strengthened the eligibility framework for small and medium enterprises (SMEs) seeking migration to the mainboard, as well as for companies listed on other exchanges aiming for direct listing. The move is aimed at enhancing transparency, investor protection and the overall quality of listings, the bourse said. 

It comes over three months after the National Stock Exchange (NSE) raised the bar for migration to its mainboard. 

Under the revised norms, companies will now need to have an operating profit of at least ₹15 crore over the last three financial years, with a minimum of ₹10 crore in each of those years. 

 

This is an increase from the earlier requirement of positive operating profit in at least two out of the last three years. 

 

Additionally, the minimum number of public shareholders required have been increased fourfold, from 250 to 1,000. New liquidity requirements have also been introduced.  

 

In the past six months, at least 5 per cent of the weighted average number of equity shares should be traded. Furthermore, trading has to occur on at least 80 per cent of market days in the period.

 

Companies must also have net tangible assets of at least ₹3 crore in each of the last three financial years and maintain a clean compliance record over the same period.

 

BSE said that these changes are part of its ongoing efforts as a market infrastructure institution and front-line regulator to improve investor confidence and market integrity.

 

More than 600 companies are listed on BSE’s SME platform. Of these, nearly 200 have migrated to the mainboard. The combined market cap of 405 companies currently trading on the BSE SME platform is ₹75,000 crore.