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S&P BSESME IPO      

Institutional Trading Platform

In the budget speech, the Honorable Finance Minister, announced that the start ups and SMEs can get listed on the bourses without IPO. Accordingly, SEBI has made the provision in ICDR guideline by introducing Chapter XC whereby listing on the Exchange made possible without bringing Initial Public Offer (IPO). SEBI has notified the same on 8th October 2013 and also issued a detailed circular on 24th October, 2013. The benefits of listing on ITP are as follows:

  • Facilitate capital raising by small and medium enterprises including start-up companies which are in their early stages of growth
  • Provide easier entry and exit options for informed investors like angel investors, VCFs and PEs etc., to and from such companies.
  • Provide better visibility and wider investor base
  • Relaxed compliance and cost effective listing
  • Tax benefits to long term Investors

The Eligibility Criteria for the company desirous of listing are as follows:

Regulatory Criteria:

  • The company, its promoter, group company or director does not appear in the willful defaulters list of Reserve Bank of India as maintained by Credit Information Bureau (India) Limited (CIBIL).
  • There is no winding up petition against the company that has been admitted by a competent court.
  • The company, group companies or subsidiaries have not been referred to the Board for Industrial and Financial Reconstruction within a period of five years prior to the date of application for listing.
  • No regulatory action has been taken against the company, its promoter or director, by the Board, Reserve Bank of India, Insurance Regulatory and Development Authority or Ministry of Corporate Affairs within a period of five years prior to the date of application for listing.
Exchange Criteria:

  • The Company shall satisfy at least one of the following criteria as on date of application:-
    Net Tangible Assets of minimum Rs. 1 Crore. (Net Fixed Assets plus Net Current Assets)
    OR
    Net income* (excluding extraordinary and other income) of Rs. 50 Lacs as per the latest audited financials. *(Net income = Sales – Purchases)
  • There has been no change in the promoters of the Company in preceding one year from date of filing application to BSE for listing on ITP segment.
  • Mandatorily signing tripartite agreement with both the depositories.
Financial Criteria:

  • The paid up capital of the company has not exceeded 25 crore rupees in any of the previous financial years.
  • The company has at least one full year’s audited financial statements, for the immediately preceding financial year at the time of making listing application.
  • The company has not completed a period of more than 10 years after incorporation and its revenues have not exceeded 100 crore rupees in any of the previous financial years
  • At least one of the following criteria:

    1. At least one alternative investment fund, venture capital fund or other category of investors/lenders approved by the Board has invested a minimum amount of 50 lakh rupees in equity shares of the company.

    2. At least one angel investor who is a member of an association/group of angel investors which fulfils the criteria laid down by the recognized stock exchange, has invested a minimum amount of 50 lakh rupees in the equity shares of the company through such association/group.

    3. The company has received finance from a scheduled bank for its project financing or working capital requirements and a period of 3 years has elapsed from the date of such financing and the funds so received have been fully utilized.

    4. A registered merchant banker has exercised due diligence and has invested not less than 50 lakh rupees in equity shares of the company which shall be locked in for a period of three years from the date of listing. The same merchant banker is also required to submit a Due Diligence certificate as per format given in Form A & Form H of Schedule VI of SEBI (ICDR) Regulations, 2009.

    5. A qualified institutional buyer has invested not less than 50 lakh rupees in the equity shares of the company which shall be locked in for a period of three years from the date of listing.

    6. A specialized international multilateral agency or domestic agency or a public financial institution as defined under section 4 A of the Companies Act, 1956 has invested in the equity capital of the company.