BSE tightens framework for SMEs to migrate to main board

Bombay Stock Exchange on Monday tightened the eligibility norms for small and medium enterprises (SMEs) companies that want to list in the main market and companies listed on other exchanges that want to list directly. BSE stated that the step is to "promote transparency, disclosure and thereby enhance the quality of listings".

As a part of the reform, in the case of SMEs' migration or direct listing to the mainboard, the exchange raised the requirement of operating profitability to Rs 15 crore for the last 3 financial years. According to the new guidelines, the minimum operating profit must be Rs 10 crore in each financial year. Previously, there was a requirement of positive operating profit in at least 2 out of 3 financial years.

Additionally, the minimum number of public shareholders has been increased from 250 to 1,000.

In addition, companies wishing to come on the main board through migration or direct listing must have a turnover of at least 5 per cent of the weighted average number of listed equity shares during the last six months. This turnover should be at least 80 per cent of the days during the six-month period. Apart from this, companies should have net tangible assets of at least Rs 3 crore in each of the last three financial years. They should also have a compliance track record of three years.