24 Apr NSE raises entry bar for SMEs seeking main board migration
According to a circular issued by the exchange on April 24, SME companies must now be listed on the SME platform for a minimum of three years before they can apply for migration. Additionally, the companies must have a minimum paid-up equity capital of Rs 10 crore.
Stricter financial and governance requirements
The updated rules include several financial performance and corporate governance requirements. To qualify, SMEs must have posted revenue from operations exceeding Rs 100 crore in the last financial year. They are also required to report a positive operating profit from operations in at least two out of the past three financial years.The exchange further mandated that such companies must have a net worth of at least Rs 75 crore and a minimum of 500 public shareholders as of the application date.
Promoter holding and regulatory compliance
The NSE specified that promoters and promoter groups must hold at least 20% of the company at the time of application. Moreover, the promoters must retain at least 50% of the shares they held at the time of initial SME listing when applying for main board migration.To qualify, companies must not be undergoing proceedings under the Insolvency and Bankruptcy Code (IBC) or be subject to any winding-up petitions admitted by the National Company Law Tribunal (NCLT). They must also have a clean regulatory track record, with no material actions such as trading suspensions or SEBI debarments in the past three years. All investor complaints must be resolved in the SCORES platform, the exchange said in its circular.The revised framework is designed to ensure only mature and compliant SME firms with solid fundamentals are eligible for main board listing, reinforcing investor confidence and enhancing market discipline.
Also read | Bullish momentum brewing? 80% of NSE500 stocks now above 50-day average, says Axis Securities
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)