Keeping in mind a specific end goal to promote new businesses, Bombay Stock Exchange (BSE) plans to soar a new platform for listing of startups in the tech segment of Information Technology Enabled Services(ITES), Information Technology(IT), biotechnology and life sciences, 3D printing, space technology and e-commerce. According to a recent talk with one of the officials, the platform would roll out on 9th July this year.
BSE which claims to be Asia’s first and the world’s speediest exchange will also provide aid to startups in the field of hi-tech defence, drones, nano technologies, artificial intelligence, big data, virtual reality, e-gaming, robotics, genetic engineering among other mentioned segments.
Who is Eligible ?
- Criteria #1: The startups eligible for listing should have a positive net profit as well as a pre-issue paid up equity share capital of a minimum of Rs 1 crore.
- Criteria #2: Other than this the new-age company should also have a minimum survival period of 3 years from the date of filing the draft prospectus with the BSE.
Bombay Stock Exchange also provided further supplementary particulars for the SMEs (Small and Medium Enterprises) in the above mentioned group who wanted to propose listing on the new platform. Minutiae for eligibility are as follows:
- Criteria #3: The startup in preference should have assets by qualified institutional buyers (QIB investors)/angel investors for at least a time span of two years at the time of registering of the draft prospectus with the BSE.
- Criteria #4: The company must not have been cited by National Company Law Tribunal (NCLT) for Insolvency and Bankruptcy Code furthermore there should not be any close down petition versus the company that has been approved by the NCLT.
- Criteria #5: In accordance with disclosures and transfer to the main board, regulation germane to BSE SME segment would be pertinent to such firm.
This new platform plans to act as a catalyst providing added incentives to the Small and Medium enterprise (SME) stratum. During the first half of this month SEBI (Security And Exchange Board of India) assembled a committee to find contemporary ways to make these listings even more lucrative.
The committee seeks to inspect the current Emerge Institutional Trading Platform(ITP) structure and suggest the necessary amends and the plausible inaccuracies for its failure.
As will be the situation for the greater part of the developing economies, small and medium enterprises (“SMEs”) in India too hold an indispensable post for the inspiriting of the social and economic growth of our country.
- In India, SMEs elucidate approximately 8% of the gross domestic product (GDP), 50% of absolute manufactured exports plus 45% of the total industrial hiring(with approximately 55% of the labor pool from rural areas)
- There are some stipulations that point out that the National Stock Exchange (NSE) is in talks with SEBI to increase relaxation for startup listing regulations on its platform Emerge ITP.
The readings point out that BSE SME exchange has well variegated companies in terms of market cap furthermore most of the associations listed on it are conducive in general. Whereas, a bigger part of the companies on the EMERGE platform are making losses. But that does not change the fact that its market turnover has had a better rate of improvement in the previous year than that of its competitor exchange.
Nonetheless, due to not-so-startup-affable regulations, just a minute figure of 11 startups have been listed on the platform since its launch in August,2015.
As of now SEBI is undertaking some reforms concerning angel investments and different structures in the market. The imminent launch of the startup platform by BSE will assuredly attract Indian startups to get listed on any one of the two accessible platforms.
What are the Benefits ?
Advantage #1: Exit Route/Fundraising Listing gives a chance to the corporates/business visionaries to raise cash-flow to finance new tasks/embrace extensions/expansions and for acquisitions,likewise gives an exit course to private value speculators and in addition provides liquidity to the ESOP-holding workers.
Advantage #2: Advanced Company Practices Since the infringement of the listing accord involves the de-listing/termination of securities from the rings of the trade,the listed organizations are expected to take after reasonable practices to benefit the investors and the community.
Advantage #3: Reasonable Price for the Securities The costs are openly landed based on demand and supply; the stock trade citations are contemplated by the genuine estimation of the security.In this manner listings create a free valuation of the organization by the market.
Advantage #4: Defined Marketability of Security Listing acquires liquidity and defines attractiveness of securities on a persistent premise adding eminence and significance to recorded organizations.
Advantage #5: Aid to Public The data separated out by the stock trade as value citations etc; give profitable data to the general population which can be utilized for task and research studies.The stock trade costs can be an index of the condition of the economy. Money related foundations, NRl, singular financial investors and so on can take shrewd choices prior to making investments.
“BSE Platform for listing new companies will surely act as a catalyst for growth within the sector. Presently, the industries are confined, thus if it opens up to all it could also boost creativity and innovation.”
Niranj Sangal, CEO, OMA Emirates
(recently took over Indian PoS company Mobiswipe)
“I agree to the point which Niraj has quoted. But this revolutionary initiative by BSE is a step forward to bring exponential growth that was never witnessed earlier by SME’s”
Shweta Gupta (Founder and CEO, MUDS Management Pvt Ltd)