Description

BSE revises unified eligibility criteria for SME companies seeking migration to Main Board and companies from other exchanges seeking direct listing.

Summary

BSE has revised the unified eligibility criteria for SME companies seeking migration to Main Board and for companies listed on other recognized stock exchanges seeking direct listing on Main Board. The circular establishes comprehensive requirements covering financial metrics, market liquidity, compliance standards, and regulatory conditions.

Key Points

  • Minimum paid-up capital requirement of Rs. 10 crores
  • Market capitalization requirements: Rs. 100 crores for migration, Rs. 1000 crores for direct listing
  • Average operating profit (EBITDA) of Rs. 15 crores over preceding 3 years with minimum Rs. 10 crores each year
  • Minimum 20% promoter holding at application time
  • 6-month lock-in period for promoter shares from BSE listing date
  • 3-year track record requirement with clean compliance history
  • Stringent market liquidity parameters including trading frequency and turnover thresholds

Regulatory Changes

  • Unified eligibility criteria now applies to both SME migration and direct listing scenarios
  • Enhanced market liquidity requirements with specific trading volume and frequency metrics
  • Strengthened compliance framework with zero tolerance for regulatory violations
  • Updated net tangible assets criteria with monetary asset utilization provisions

Compliance Requirements

  • Companies must maintain minimum Rs. 1 crore networth in each of preceding three years
  • Net tangible assets of at least Rs. 3 crores with restrictions on monetary asset concentration
  • 100% dematerialized promoter shareholding mandatory
  • No pending SEBI debarment orders or wilful defaulter status for company, promoters, or directors
  • Trading on at least 80% of days during 6-month assessment period
  • Minimum 5% of weighted average equity shares must be traded during assessment period
  • Average daily turnover of Rs. 10 lakhs and minimum daily turnover of Rs. 5 lakhs

Important Dates

  • 6-month lock-in period applies from date of listing on BSE
  • 6-month market capitalization and liquidity assessment period
  • 3-year track record evaluation for operating profit and compliance history
  • Assessment based on preceding 3 full years of 12 months each

Impact Assessment

This revision establishes more structured and transparent pathways for SME companies to access main board listing while ensuring adequate investor protection through stringent eligibility criteria. The differentiated market cap requirements (Rs. 100 crores vs Rs. 1000 crores) recognize the different risk profiles of migrating SME companies versus direct listings from other exchanges. Enhanced liquidity parameters will ensure better market quality post-migration, while comprehensive compliance checks protect market integrity.

Impact Justification

Affects SME companies planning migration to main board and companies seeking direct listing - significant for growth trajectory but limited immediate market impact