IPO Under SME Sector

BSE launched its SME bourse fully, with the listing of BCB Finance, a Mumbai-based broking house and NBFC. BCB Finance raised 8.85 crore through an issue of 35.4 lakh shares, which was oversubscribed 1.5 times. The stock listed at 27, or 8% above its post-IPO offer price of 25. BCB is promoted by Uttam Bagri, a member of BSE board. So far, about 50 firms from all accross the country has shown interest to be listed on the BSE SME. Though suspended firms are not allowed to list on the SME exchange, an option is provided to the such firms, which have a paid up capital of less than Rs.25 crore, to migrate to the SME exchange after taking necessary approvals. For suspended companies, these have to first comply with main board norms, get their suspension revoked, get two-third of the shareholders to back the move and then apply to the exchange.

NSE, which has named its SME bourse ‘Emerge’, also announced the filing of the first SME draft red herring prospectus by the Chennai-based Thejo Engineering.

Eligibility Conditions
The eligibility norms announcecd for listing on SME are as follows-

  • Net tangible assets of at least Rs 1 crore as per the latest audited financial results.
  • Net worth (excluding revaluation reserves) of at least Rs 1 crore as per the latest audited financial results.
  • Track record of distributable profits in terms of sec. 205 of Companies Act, 1956 for at least two years out of immediately preceding three financial years and each financial year has to be a period of at least 12 months. Extraordinary income will not be considered for the purpose of calculating distributable profits. Other wise, the networth shall be at least Rs 3 crore.
  • The post-issue paid up capital of the company shall be at least Rs 1 crore (e)The company shall mandatorily facilitate trading in demat securities and enter into an agreement with both the depositories.
  • Companies shall mandatorily have a website.