New SEBI norms to make SME listing simpler

In a move to encourage small and medium enterprises (SMEs) to get listed on proposed stock exchanges dedicated to the sector, stock market regulator Securities and Exchange Board of India (SEBI) has issued a model listing agreement for SMEs seeking listing on the SME exchange, which relaxes the listing requirements for such enterprises.

According to a SEBI circular on Tuesday, companies listed on the SME exchange are required to send only a statement containing the salient features of all the documents to their shareholders instead of the entire annual report.

Further, SME-listed companies need to submit financial results only on a half yearly basis instead of a quarterly basis, as is the rule for larger enterprises. Further, these companies will not be required to publish their financial results. Instead, it should be made available on their websites.

Exchanges like the National Stock Exchange, Bombay Stock Exchange, MCX'SX, Inter-connected Stock Exchange and Bangalore Stock Exchange have shown keen interest in launching a separate SME platform after SEBI issued the operational guidelines. The regulator had earlier relaxed the minimum net worth criteria and track record for companies seeking listing on SME exchange as compared to that of the usual exchange.

An issuer with a post issue paid up capital up to Rs25 crore is eligible for SME listing. It will have to migrate to the main exchange subject to exchange approval if its capital exceeds beyond the prescribed limit.

In a separate circular issued on Tuesday, the regulator clearly laid down the policy for issue, listing and trading of the securities issued by SMEs. SEBI said that an issuer listed on a SME exchange and whose post-issue face value capital pursuant to further issue of capital does not exceed Rs10 crore shall make further issue of specified securities.