The Metropolitan Stock Exchange of India (MSEI) and the SME Chamber of India have collaborated to provide a facility to help small and medium enterprises (SMEs) and startups access asset classes like currency derivatives, interest rate derivatives and listing.

Under the initiative, SME Chamber would provide industry inputs and insights, while MSEI would create a network of active venture capital and Private Equity funds under the Prime Minister’s Startup India initiative.

“Our platform is designed to provide the right financial products for assistance to SMEs in raising capital, hedging business risk from volatile currency prices and against rising interest rates“, said MSEI MD and CEO Udai Kumar.

“We see a huge opportunity in the vast network of VCs and PEs in India who can participate on a platform for providing much needed capital to the startup India initiative of the government.”

Kumar said that MSEI cannot launch an SME platform like BSE and NSE as it does not have the requisite technical preparedness like its peers.

Rajeev Kumar Agarwal, a whole-time member of the Securities and Exchange Board of India, said disclosure requirements discourage SMEs from listing on the capital markets.

“Disclosure is one requirement which makes the entrepreneurs hesitate in going for listing,” he said, urging the SMEs to go for listing as it would benefit their future growth and provide them visibility.

He also noted that disclosure requirement for SMEs is less compared to that of other listed companies and there is more awareness on the issue among companies now.

Another factor that prevents good SMEs from listing is the current regulatory framework that places too much responsibility on merchant bankers, according to Kumar.

Source: SMBWorld Asia