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 Main Board and for companies listed on other recognized stock exchanges seeking direct listing on Main Board. The circular establishes comprehensive financial, operational, and compliance requirements including market capitalization thresholds, liquidity criteria, profitability standards, and regulatory compliance 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 in each year
  • Minimum 20% promoter holding at application time
  • 6-month lock-in period for promoter shares (not applicable to SME migrations)
  • Comprehensive regulatory compliance and track record requirements
  • Minimum 3-year listing history requirement

Regulatory Changes

  • Updated market capitalization thresholds with distinction between migration (Rs. 100 crores) and direct listing (Rs. 1000 crores)
  • Enhanced market liquidity requirements including minimum daily turnover of Rs. 10 lacs average and Rs. 5 lacs minimum
  • Strengthened operating profit criteria with consolidated basis calculation over 3 years
  • Refined promoter holding and lock-in provisions with specific exemptions for SME migrations

Compliance Requirements

  • Companies must maintain at least 5% of weighted average equity shares traded during 6-month period
  • Trading required on at least 80% of days during 6-month assessment period
  • Minimum 50 average daily trades and 25 minimum daily trades during assessment period
  • Net worth of Rs. 1 crore in each of preceding three years on consolidated basis
  • Net tangible assets of at least Rs. 3 crores with monetary asset limitations
  • 100% shareholding in demat form
  • No SEBI debarment orders, wilful defaulter status, or fraudulent borrower classification
  • No pending NCLT proceedings or IBC admissions

Important Dates

  • 6-month lock-in period for promoter shares from BSE listing date
  • 3-year minimum listing track record required
  • 6-month assessment period for market capitalization and liquidity calculations
  • 3-year historical financial performance evaluation period

Impact Assessment

The revised criteria create a more structured pathway for companies to access BSE’s Main Board while ensuring adequate market depth and investor protection. Companies planning migration or direct listing will need to demonstrate stronger financial performance and market presence. The differentiated market cap requirements acknowledge the varying risk profiles between migrating SME companies and direct listings from other exchanges.

Impact Justification

Affects companies seeking to migrate from SME to Main Board or list directly from other exchanges