Information

SME exchange is a stock exchange dedicated for trading the shares of small and medium scale enterprises (SMEs) who, otherwise, find it difficult to get listed in the main exchanges. The SME platform of Exchanges is a new exciting platform for small and medium sized companies with high growth potential. SME platform will provide an efficient route to listing for prospective SME issuers. The SME companies would derive several benefits from listing on the SME platform. CoKaCo expert team provide advisory services and assistance to the prospective SME Companies, who are looking to be listed on SME platforms of both the exchanges.

Features of SME Listing :-

  • Easy capital and funds availability
  • Brand value in industry
  • It is a M & A currency
  • ESOP – Talent retention at lower cost
  • Easy exit option for existing minority investors
  • Getting true value of company in terms on market capitalization
  • Unlocking of value on basis of future prospects& P/E multiples
  • Thus, greater profitability = better valuation
  • Better governance and compliance environment, self discipline
Eligibility for BSE SME Listing :- Eligibility for NSE Emerge Listing :-
  • Net Tangible Assets should be Rs. 3 Crore or more
  • The post issue paid up capital of the company (face value) shall not be more than Rs. 25 crores
  • Positive Net worth
  • The company or the partnership/proprietorship/LLP firm or the firm which have been converted into the company should have a combined track record of at least 3 years
  • OR

  • In case it has not completed its operation for three years then the Company/Partnership/Proprietorship/LLP should have been funded by way of loan/equity by Banks or Financial Institutions or Central or State Government or its undertaking, or its Group Company should have been listed for at least two years either on the Main Board or SME Board of the Nationwide Exchange
  • The company / firm (or the firm which has been converted into the company) should have combined positive cash accruals (earnings before depreciation and tax) from operations for at least 2 financial years preceding the application and its net worth should be positive
  • The post issue paid up capital of the company (face value) shall not be more than Rs. 25 crores
  • Track record of at least three years of either
    1. The applicant seeking listing; or
    2. The promoters/promoting company, incorporated in or outside India or
    3. Proprietary / Partnership firm and subsequently converted into a Company (not in existence as a Company for three years) and approaches the Exchange for listing
  • Promoters mean one or more persons with minimum 3 years of experience in the same line of business and shall be holding at least 20% of the post issue equity share capital individually or severally.
  • The company/entity should have positive cash accruals (earnings before depreciation and tax) from operations for at least 2 financial years preceding the application and its net-worth should be positive.

Advantages Over Mainboard :-

  • Exchange (not SEBI) vetting of prospectus
  • Min 50 investors instead of 1000
  • Relaxed track record norms, no IPO grading required
  • Reduced IPO time and costs
  • Six monthly reporting compliances instead of quarterly
  • Seamless migration to main board after 2 years on making a simple application

SME IPO Activity Chart :-

No Procedure Timeline
1 Procedure Conversion of Company into Public Limited Company, if applicable X
2 Preparation of Documents for conversion and submission to ROC for approval i.e. Alteration of Memorandum, Articles & filing of necessary forms for appointment of aforesaid directors X + 5
3 ROC approval accorded for conversion X + 7
4 Appointment of Managing Director, Whole Time Director, Independent Directors, Company Secretary & deciding about their remuneration, sitting fees etc. X + 12
5 Constitution of committees - Audit, Shareholder Grievance, Remuneration etc. as per Companies Act 2013 and SEBI (LODR) Regulations. X + 15
6 Updating Website of the Company X + 18
7 Appointment of Merchant Banker & Market Maker X + 18
8 Identification & appointment of Registrar & Transfer Agents & Submission of Master Creation forms with NSDL, CDSL for establishing connectivity X + 18
9 Signing of Tri-Partite Agreement with NSDL & CDSL X + 19
10 Identification & appointment of peer review auditors & getting the financials of last 5 years restated and for last 1 year re-audited from peer review auditors as per SEBI (ICDR) Regulations, 2009 X + 19
No Clearance from stock exchange Procedure Timeline
11 Preparation of Project Report and Red Herring Prospectus (RHP) and Receipt of ISIN X + 35
12 Filing of Red Herring Prospectus (RHP) with stock exchange & SEBI (only for hosting) along with application for in-principle approval with stock exchange X + 38
13 Filing of corporate action form with NSDL & CDSL and demat credit of shares X + 40
14 Clearance from stock exchange X + 55
15 Filing of Red Herring Prospectus (RHP) with ROC & getting it cleared from ROC X + 60
16 Filing of Final Prospectus with Stock exchange and SEBI X + 65
17 Opening of the Issue X + 70
18 Closing of the Issue X + 73
19 Allotment of shares X + 80
20 Filing of listing application with Stock exchange X + 83
21 Receipt of listing approval from Stock exchange X + 85
22 Filing of trading application with Stock exchange X + 88
23 Receipt of trading approval from Stock exchange X + 90
Stage Timeline Particulars
Stage I Within 15 days of signing the mandate Memorandum of Association - Certified Copy
Articles of Association - Certified Copy
Certificate of Incorporation - Certified Copy
Name change certificate - Certified Copy
Shareholding Pattern - Certified Copy
Statutory Registers
Website of the company
Logo of the Company
Details of Statutory Auditors
Name of the Company Secretary cum Compliance Officer & CFO
Intellectual Property Registration or Application Documents
Top 10 supplier & customer
Audited Annual Reports of the company for the last five Financial Years
Information

SME exchange is a stock exchange dedicated for trading the shares of small and medium scale enterprises (SMEs) who, otherwise, find it difficult to get listed in the main exchanges. The SME platform of Exchanges is a new exciting platform for small and medium sized companies with high growth potential. SME platform will provide an efficient route to listing for prospective SME issuers. The SME companies would derive several benefits from listing on the SME platform. CoKaCo expert team provide advisory services and assistance to the prospective SME Companies, who are looking to be listed on SME platforms of both the exchanges.

  • Easy capital and funds availability
  • Brand value in industry
  • It is a M & A currency
  • ESOP – Talent retention at lower cost
  • Easy exit option for existing minority investors
  • Getting true value of company in terms on market capitalization
  • Unlocking of value on basis of future prospects& P/E multiples
  • Thus, greater profitability = better valuation
  • Better governance and compliance environment, self discipline
Eligibility for BSE SME Listing :-
  • Net Tangible Assets should be Rs. 3 Crore or more
  • The post issue paid up capital of the company (face value) shall not be more than Rs. 25 crores
  • Positive Net worth
  • The company or the partnership/proprietorship/LLP firm or the firm which have been converted into the company should have a combined track record of at least 3 years
  • OR

  • In case it has not completed its operation for three years then the Company/Partnership/Proprietorship/LLP should have been funded by way of loan/equity by Banks or Financial Institutions or Central or State Government or its undertaking, or its Group Company should have been listed for at least two years either on the Main Board or SME Board of the Nationwide Exchange
  • The company / firm (or the firm which has been converted into the company) should have combined positive cash accruals (earnings before depreciation and tax) from operations for at least 2 financial years preceding the application and its net worth should be positive
Eligibility for NSE Emerge Listing :-
  • The post issue paid up capital of the company (face value) shall not be more than Rs. 25 crores
  • Track record of at least three years of either
    1. The applicant seeking listing; or
    2. The promoters/promoting company, incorporated in or outside India or
    3. Proprietary / Partnership firm and subsequently converted into a Company (not in existence as a Company for three years) and approaches the Exchange for listing
  • Promoters mean one or more persons with minimum 3 years of experience in the same line of business and shall be holding at least 20% of the post issue equity share capital individually or severally.
  • The company/entity should have positive cash accruals (earnings before depreciation and tax) from operations for at least 2 financial years preceding the application and its net-worth should be positive.
Advantages Over Mainboard :-
  • Exchange (not SEBI) vetting of prospectus
  • Min 50 investors instead of 1000
  • Relaxed track record norms, no IPO grading required
  • Reduced IPO time and costs
  • Six monthly reporting compliances instead of quarterly
  • Seamless migration to main board after 2 years on making a simple application

SME IPO Activity Chart :-

No Procedure Timeline
1 Procedure Conversion of Company into Public Limited Company, if applicable X
2 Preparation of Documents for conversion and submission to ROC for approval i.e. Alteration of Memorandum, Articles & filing of necessary forms for appointment of aforesaid directors X + 5
3 ROC approval accorded for conversion X + 7
4 Appointment of Managing Director, Whole Time Director, Independent Directors, Company Secretary & deciding about their remuneration, sitting fees etc. X + 12
5 Constitution of committees - Audit, Shareholder Grievance, Remuneration etc. as per Companies Act 2013 and SEBI (LODR) Regulations. X + 15
6 Updating Website of the Company X + 18
7 Appointment of Merchant Banker & Market Maker X + 18
8 Identification & appointment of Registrar & Transfer Agents & Submission of Master Creation forms with NSDL, CDSL for establishing connectivity X + 18
9 Signing of Tri-Partite Agreement with NSDL & CDSL X + 19
10 Identification & appointment of peer review auditors & getting the financials of last 5 years restated and for last 1 year re-audited from peer review auditors as per SEBI (ICDR) Regulations, 2009 X + 19
No Clearance from stock exchange Procedure Timeline
11 Preparation of Project Report and Red Herring Prospectus (RHP) and Receipt of ISIN X + 35
12 Filing of Red Herring Prospectus (RHP) with stock exchange & SEBI (only for hosting) along with application for in-principle approval with stock exchange X + 38
13 Filing of corporate action form with NSDL & CDSL and demat credit of shares X + 40
14 Clearance from stock exchange X + 55
15 Filing of Red Herring Prospectus (RHP) with ROC & getting it cleared from ROC X + 60
16 Filing of Final Prospectus with Stock exchange and SEBI X + 65
17 Opening of the Issue X + 70
18 Closing of the Issue X + 73
19 Allotment of shares X + 80
20 Filing of listing application with Stock exchange X + 83
21 Receipt of listing approval from Stock exchange X + 85
22 Filing of trading application with Stock exchange X + 88
23 Receipt of trading approval from Stock exchange X + 90
Stage Timeline Particulars
Stage I Within 15 days of signing the mandate Memorandum of Association - Certified Copy
Articles of Association - Certified Copy
Certificate of Incorporation - Certified Copy
Name change certificate - Certified Copy
Shareholding Pattern - Certified Copy
Statutory Registers
Website of the company
Logo of the Company
Details of Statutory Auditors
Name of the Company Secretary cum Compliance Officer & CFO
Intellectual Property Registration or Application Documents
Top 10 supplier & customer
Audited Annual Reports of the company for the last five Financial Years