Market regulator Securities and Exchange Board of India (SEBI) and the country’s leading stock exchange NSE have come forward to handhold SMEs in the region to raise funds for their expansion/diversification by getting listed.

After the Government of India liberalized the norms for listing, allowing SMEs and startups, 128 companies preferred to hit the Dalal Street raising Rs.850 crore from the public. For opting the IPO mode, one needs to have a track record of three years with a positive cash accruals from operations for at least two financial years, post-issue paid-up capital (face value) of Rs.25 crore, at least 50 allottees, and IPO underwriting of 100 per cent (15 per cent on the books of merchant bankers).

Post-issue, they should have half-yearly auditing, mandatory market making and corporate governance like the companies on the main board.

SEBI and NSE officials, at their first interactive meet held here recently by Andhra Chambers of Commerce and Industry Federation, stated that to get listed one should have fairly good knowledge on capital market, weigh IPO option versus other options, finalize capital funding plan, and engage merchant banker to manage the IPO.

“We have stepped up collaboration with the State Government to rope in high potential SMEs to scale up their businesses and compete by adopting best practices,” NSE Head-Business Development Ravi Varanasi told The Hindu . He said they were ready to extend wholehearted support to the SMEs interested for listing.

Visakhapatnam district has 30,000-plus SMEs with an employment of 1.8 lakh. The listing facility will benefit high-value SMEs whose number is restricted.

“Though the number of SMEs with an investment of Rs.5 crore to Rs.10 crore is limited, it will certainly help those with ambitious plans to expand their business and to compete globally,” former General Manager of District Industries Centre L. Laxman said.

To get qualified for listing, SMEs from pharma, processing, shrimp exports, hatcheries and other sectors can avail consultation from SEBI and NSE.

Source: The Hindu