Financing options available to MSMEs (SME Exchange)

MSME Sector in India

Part 19

SME Exchange

GOI and regulators have initiated several measures to address the low level of MSME financing through the capital markets. In March 2012, post issuance of SEBI guidelines, both BSE and NSE have set up institutional trading platforms in the SME segment to allow MSMEs to list and raise equity capital through venture funds, private equity and wealthy individuals, without initial public offerings.

3 SME Exchange–

SME Exchange

The listing process in this platform is completed within a month and also involves lower costs compared to regular IPO route.

Besides offering a suitable platform to raise capital, it also provides easier entry and exit options to angel investors, VCFs and PEs, etc. It also offers better visibility and wider investor base while offering tax benefits to long term investors. The platform offers relaxed compliance and cost effective listing to SMEs.

SME Exchange

Since this facility involves minimum regulatory procedures to be followed, it has already encouraged a host of MSMEs to tap the BSE’s SME platform. A total of 70 companies with a collective market capitalization of INR 8,200 crore now trade on these platforms.

These companies are from various sectors like trading, manufacturing, steel, textile and finance spread across the geography of India.

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