Sme exchange

CHENNAI3rd Floor, ‘Creative Enclave’,

148-150, Luz Church Road,Mylapore,

Chennai - 600 004.Tel: +91 - 44 - 2498 4821

BANGALORE Suite 920, Level 9,

Raheja Towers,26-27, M G Road,

Bangalore - 560 001.Tel: +91 - 80 - 6546 2400

COIMBATOREBB1, Park Avenue,

# 48, Race Course Road,Coimbatore - 641018.

Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

SME EXCHANGE

Lakshminarayanan AlagurajaAdvocateAltacit Global



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

SME EXCHANGE

An 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.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

STOCK EXCHANGE

A stock exchange provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

STOCK EXCHANGES IN INDIA

(a) National Stock Exchange (NSE) of India

(b) Bombay Stock Exchange (BSE) of India

(c) Regional Stock Exchanges (RSE) of India



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

Over-The-Counter Exchange Of India - OTCEI

The OTC Exchange of India (OTCEI), set up in 1990, was the first exchange for small companies. However, OTCEI was ahead of its time and some of the modalities were new to the market and were not conducive, and hence failed.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

INDUSTRY CONCERNS

The cost of raising capital for SMEs is quite high. The current means of financing for SMEs are not adequate

as they do not have easy access to funds from Angel Investors, VCs and PE players.

Most costs of compliance in raising capital under the existing guidelines are fixed. As a result, the costs become burdensome for smaller issues

The SMEs should be provided a framework that would enable them to raise capital quickly and at a low cost.

Owing to small size and less affordability, the eligibility conditions, listing requirements, corporate governance norms and disclosure standards may need to be suitably relaxed for SMEs.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

INTERNATIONAL EXPERIENCE

• Some of the known markets for SMEs are – AIM (Alternate Investment Market) in UK, – TSX Ventures in Canada, – GEM (Growth Enterprise Market) in Hong

Kong, – MOTHERS (Market of the high-growth and

emerging stocks) in Japan, – Catalist in Singapore and the latest initiative in

China - Chinext.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

SEBI

• “SME exchange” is defined in Chapter XA of the Securities And Exchange Board Of India (Issue Of Capital And Disclosure Requirements) Regulations] as a trading platform of a recognized stock exchange or a dedicated exchange permitted by SEBI to list the securities issued in accordance with Chapter XA of SEBI (ICDR) Regulations and this excludes the Main Board (which is in turn is defined as a recognized stock exchange having nationwide trading terminals, other than SME exchange).



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

TO BE LISTED

The post-issued paid up capital of the company should not exceed Rs. 25 Crores. This means that the SME exchange is not limited to the Small and Medium Scale enterprises which are defined under The Micro, Small And Medium Enterprises Development Act, 2006 as enterprises where the investment in plant and machinery does not exceed Rs. 10 crores.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

TO GET LISTED IN THE MAIN BOARDS

National Stock Exchange, the minimum paid up capital required is Rs. 10 crores and that of Bombay Stock Exchange is Rs. 3 crores. Hence, those companies with paid up capital between Rs. 10 crores to Rs. 25 crores has the option of migrating to the Main Board / or to SME exchange.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

DISTINCT BENEFIT

SME Exchange has distinct benefit in terms of listing and other fees which would be about half of what the main board charges. SME Exchange will help SMEs towards wealth creation by the SMEs, through inclusive economic growth, unleashing valuations and, also, creating wealth for all stakeholders, besides considerable income tax benefits and the facility to exit at any point of time.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

MINIMUM SIZE OF IPOS

There is need for 50 investors and each shall invest Rs. one lakh, amounting to Rs. 50 lakhs. This is post IPO paid up capital on lower side. This includes the promoter shareholding, besides the investments by the investors. Hence, it can be concluded that the minimum size of the IPO can be less than Rs. 50 lakhs also.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

DOCUMENTS REQUIRED

• Keeping the Annual Reports on accounts ready• Documenting the Past performance• Due diligence on the applicability of various regulations• Due Diligence on the various approvals required from regulatory

bodies• Documenting the Risk factors associated with the company• Documenting the External environment effecting the company• Listing out of litigations and documenting its magnitude and

ramifications• Documenting the Business activity• Documenting the Material contracts and agreements• Detailed report on promoters & management



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

CONCLUSION

the concept of SME exchange is new to the public and not many SMEs in IT channels know it thoroughly. It is also clear that listed SMEs will attract more investors for better access to alternate funding. Banks, financial institutions will provide them the loans very easily. The major challenge therefore is to instill confidence among SMEs and get them listed. The execution also poses a challenge where shares listed on the exchanges are often less known and may also give rise to frauds.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

EMAIL

[email protected]

WEBSITE

www.altacit.com

Sme exchange

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