NSE raises eligibility criteria for direct SME migration to mainboard

As of February, 142 SME firms have migrated to the mainboard from NSE Emerge platform

The bar has been considerably raised for small and medium enterprises (SMEs) wishing to migrate to the mainboard, as NSE on Thursday revised the eligibility criteria for such firms which included a minimum ₹100 crore revenue in the previous financial year and a positive operating profit for at least two out of three financial years.

 

The National Stock Exchange (NSE) has issued the circular with the revised set of norms, which it said will come into effect starting May 1.

 

The move comes days after India’s market regulator Securities and Exchange Board of India (Sebi) found irregularities at Gensol, a company which was first listed on the SME platform and then moved to the mainboard.

 

 

Last year, the market regulator tightened its scrutiny over SMEs following instances of fund diversion, manipulation in financials, and fictitious transactions. Sebi had revised the norms for listing of

 

SMEs, migration, and disclosure and governance requirements.

 

The stock exchanges have different platforms for listing of SMEs.

 

NSE has raised the bar further with additional requirements. For moving to the mainboard, the average capitalisation shall not be less than ₹100 crore.

 

The exchange has also prescribed higher holding by promoter and promoter group. On the date of application for migration, the promoters’ holding should not be less than 50 per cent of the shares held by them on the date of listing. 

 

According to the data from NSE Market Pulse report, a total of 142 companies have migrated from the NSE Emerge portal to the mainboard. As of February 2025, a total of ₹16,587 crore has been raised by 605 SMEs listed on the platform since the financial year 2012.

 

In February, the allotment to retail individual investors (RIIs) stood at ₹241 crore accounting for 40 per cent of the total capital raised by 11 new listings on the NSE Emerge portal. In January, it stood at 39 per cent.

 

Other eligibility conditions include no default in payment of interest and principle to the debenture, bond, and fixed deposit holders. The companies must not have any material regulatory action in the preceding three years, such as suspension of trading or any such action against the promoter.

 

NSE has also prescribed other checks on the governance.

 

According to the earlier norms before regulatory scrutiny, SMEs’ paid-up equity capital was required to be at least ₹10 crore while the threshold for equity capitalisation was at least ₹25 crore. The threshold for paid-up capital and the networth requirement of ₹75 crore remain unchanged under the new norms.

 

For migration, the SMEs will now have to be listed on the platform for at least three years and have at least 500 public shareholders on the date of application. Earlier, the companies required at least 1000 public shareholders on the last day of preceding quarter from the application date to be eligible.