Description

Updated 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 the Main Board and for companies listed on other recognized stock exchanges seeking direct listing on BSE Main Board. The criteria include enhanced financial, operational, and compliance requirements.

Key Points

  • Minimum paid-up capital requirement of Rs. 10 crores
  • Market capitalisation requirements: Rs. 100 crores for migration, Rs. 1000 crores for direct listing
  • Enhanced market liquidity requirements including minimum trading frequency and turnover
  • Operating profit requirement of Rs. 15 crores average over 3 years with minimum Rs. 10 crores each year
  • Minimum promoter holding of 20% at application time
  • 6-month lock-in period for promoter shares post-listing
  • Comprehensive regulatory compliance and track record requirements

Regulatory Changes

  • Unified eligibility criteria now apply to both SME migration and direct listing scenarios
  • Market capitalisation thresholds differentiated between migration (Rs. 100 cr) and direct listing (Rs. 1000 cr)
  • Enhanced liquidity requirements including 5% of weighted average shares traded in 6 months
  • Stricter operating profit criteria with 3-year track record requirement
  • Updated compliance framework including SEBI debarment, wilful defaulter, and IBC provisions

Compliance Requirements

  • Companies must maintain minimum Rs. 1 crore networth for 3 consecutive years
  • Net tangible assets of Rs. 3 crores with restrictions on monetary asset holdings
  • 100% shares in demat form
  • 3-year listing track record with no pending non-compliance
  • No SEBI debarment orders against company, promoters, or directors
  • Promoters and directors must not be wilful defaulters or fraudulent borrowers
  • Company not under NCLT winding up or IBC proceedings

Important Dates

  • 6-month lock-in period for promoter shares from BSE listing date
  • 6-month period for market capitalisation and liquidity calculations
  • 3-year track record requirement for financial and compliance parameters

Impact Assessment

  • Enhanced criteria may reduce number of eligible SME companies for migration
  • Higher market capitalisation thresholds for direct listing may limit cross-exchange movements
  • Strengthened compliance requirements should improve quality of Main Board listings
  • May encourage SME companies to focus on growth and compliance before attempting migration
  • Could lead to better investor confidence in migrated companies due to stricter eligibility

Impact Justification

Affects SME companies planning migration and enhances market access criteria