Description

BSE revises unified eligibility criteria for SME companies migrating 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 the main board and for companies listed on other recognized stock exchanges seeking direct listing on the main board. The circular establishes comprehensive financial, operational, and compliance requirements including market capitalization thresholds, liquidity parameters, and track record requirements.

Key Points

  • Minimum paid-up capital requirement of Rs. 10 crores
  • Market capitalization requirement: Rs. 100 crores for migration, Rs. 1000 crores for direct listing (6-month average)
  • Operating profit (EBITDA) requirement: Rs. 15 crores average over 3 years with minimum Rs. 10 crores each year
  • Market liquidity criteria including 5% trading of weighted average shares and 80% trading days requirement
  • Minimum average daily turnover of Rs. 10 lacs and minimum daily turnover of Rs. 5 lacs
  • Promoter holding requirement of at least 20% at application time
  • 6-month lock-in period for promoter shares from BSE listing date

Regulatory Changes

  • Unified eligibility criteria now apply to both SME migration and direct listing scenarios
  • Enhanced market liquidity requirements with specific turnover and trading frequency thresholds
  • Strengthened financial criteria with consolidated basis calculations for operating profit and net worth
  • Updated compliance requirements including demat shareholding mandate

Compliance Requirements

  • Companies must maintain minimum Rs. 1 crore net worth in each of preceding three years
  • Net tangible assets of at least Rs. 3 crores with restrictions on monetary assets exceeding 50%
  • No SEBI debarment orders against company, promoters, or directors
  • No wilful defaulter or fraudulent borrower status
  • 100% promoter shareholding in demat form
  • 3-year listing track record with no pending non-compliance
  • No trading suspension for non-compliance in last 12 months

Important Dates

  • 6-month lock-in period for promoter shares from BSE listing date
  • 6-month period for calculating average market capitalization and liquidity parameters
  • 3-year track record requirement for operating profit, net worth, and listing compliance

Impact Assessment

  • SME companies will need to meet higher financial thresholds for main board migration
  • Enhanced liquidity requirements may limit eligible companies but improve market quality
  • Direct listing companies face significantly higher market cap requirements (Rs. 1000 crores vs Rs. 100 crores)
  • Strengthened compliance framework reduces regulatory risks for main board listings
  • May lead to improved investor confidence in migrated and directly listed securities

Impact Justification

Affects SME companies seeking main board migration with revised financial and operational criteria