Going public provides SMEs with equity financing opportunities to grow their business from operations to expansion to inorganic acquisitions. Access to equity financing lowers the debt burden leading to lower financing costs and healthier balance sheets.
Income- tax Act offers immense benefits to companies if their shares are listed on recognized stock exchanges including SME Exchange. Tax benefits, often, turns out to be one of prominent factors for listing
Visibility – Profile Building :
– Going for a public issue is likely to enhance the company’s visibility and prestige
Benchmarking Value:- The companies listed on a stock exchange are traded and the market forces are expected to establish their fair value.
Incentive Mechanism for Employees:– ESOPs and any other share-based compensation plan of listed company have an immediate and tangible value to employees
Facilitate growth through Mergers and Acquisitions :- As a public company, company’s shares can be utilized as an acquisition currency to acquire target companies, instead of a direct cash offering
ELIGIBILITY CRITERIA FOR BSE SME
Post Issue Paid up
capital of the company shall be at least Rs 3 Crore
Net Tangible assets of at least INR 3 Crore as per the latest audited financial results.
Net-worth (excluding revaluation reserves) of at least INR 3 Crore as per the latest audited financial results.
Track record of distributable profits in terms of section 123 of Companies Act, 2013 for at least two years out of immediately preceding three financial years. Otherwise, the net-worth shall be at least INR 5 Crore.
The company shall mandatorily facilitate trading in DEMAT securities and enter into an agreement with both the depositories.
The company shall mandatorily have a website.
There should not be any change in the promoters of the company in preceding one year from the date of filling the application.
ELIGIBILITY CRITERIA FOR NSE EMERGE
Post IssuePaid upcapital
of the company shall not be more than Rs 25 Crore
The company should have positive cash accruals (earnings before depreciation and tax) from operations for at least 2 financial years preceding the application and its net-worth should be positive.
The company has not been referred to Board of Industrial and Financial Reconstruction
No petition of winding up is admitted by court against the applicant company
No Regulatory or disciplinary action by stock
exchange or regulatory authority in past three year