Public Listing

Public Listing

MSMEs with a good track record can also access funding from the public through the public listing process through the initial public offer (IPO). However, the IPO route is limited in that it is only possible for those who have established a strong record of past performance and reputation in the market.

The Securities and Exchange Board of India (SEBI) has recently relaxed share-listing norms for small and medium enterprises (SMEs) by allowing them to disclose their financial results every six months instead of three months, as is the norm for bigger companies.

Some other salient features of SEBI’s share-listing norms for SMEs include:

  • Companies listed on the SME exchange will not be required to send a full annual report to their shareholders and also need not publish their financial results as required in the main stock exchange. Companies listed on the SME exchange may send to their shareholders a statement containing the salient features of all the documents.

  • The companies will have to maintain a public share holding of at least 25% of the total number of issued shares at all times. In other words, the promoters’ stake cannot exceed 75%.

To download the circular issued by SEBI providing conditions for issuers seeking listing on SME Exchange, click here