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An enactment of Government of India Provides for facilitation of promotion, development and enhancing the competitiveness of MSMEs Introduction of statutory consultative and recommendatory bodies on MSME polices Statutory basis for purchase preference and credit policies Improve realization of payments of MSMEs
SME Exchange
Jan 2010: The Prime Minister's Task Force recommended to set-up a dedicated Stock Exchange/ Platform for SMEs. May, 2010: SEBI issued a final circular for setting up a stock exchange/ trading platform by a recognized Stock Exchange having nationwide trading terminals for SMEs. SEBI also laid down the Regulations for the governance of SME Exchange/Platform. Chapter XB has been inserted in the ICDR Regulations. Model Equity Listing Agreement has been issued. May 2011: Bombay Stock Exchange Ltd received an in-principle approval from SEBI for launching the SME Exchange.
Exchange Coverage
Post Issue Face Value of Capital Up to Rs. 10 Crores Coverage
Exempt from Regulations 25, 26 and 27 of ICDR Regulations Reg. 25 provides for the reference dates on which the provisions of Chapter III of the ICDR Regulations must be satisfied. Reg. 26 provides for the conditions of the Initial Public Offer. A brief is as under: Minimum Net tangible assets to be Rs. 3 Crores Track record of distributable profits for minimum 3 out of 5 years Net worth of at least Rs. 1 Crore Reg. 27 provides for the conditions which shall be satisfied in case of Further Public Offer Minimum 50 investors at the IPO Stage and no continuous requirement of minimum shareholders.
Migration
In case of issue by a listed issuer in accordance with the provisions of this chapter, it shall migrate the existing securities to the SME Exchange Post issue face value less than Rs. 25 Crores then, may migrate to SME Exchange if: Approved by Special Resolution through Postal ballot Votes cast by Shareholders other than promoters in favour to at least two times the number of votes cast by shareholders other than promoters against the proposal Fulfills the eligibility criteria as laid down by SME Exchange
Chapter XB of the SEBI (ICDR) Regulations Post issue face value more than Rs. 10 Crores and upto Rs. 25 Migration Crores may migrate to main boards if:
Approved by Special Resolution through Postal ballot Votes cast by Shareholders other than promoters in favour to at least two times the number of votes cast by shareholders other than promoters against the proposal Fulfills the eligibility criteria as laid down by main Board In a case, where the Post issue face value is likely to increase beyond Rs. 25 Crores by virtue of right issue, bonus issue, preferential issue etc., then it shall migrate to Main Board subject to fulfillment of eligibility criteria laid down by the Main Board Provided no further issue of capital be made unless: The shareholders approval by way of special resolution through postal ballot Votes cast by Shareholders other than promoters in favour to at least two times the number of votes cast by shareholders other than promoters against the proposal The issuer has obtained in principle approval from the main board
Applicability of sub-clause (iv) of clause (b) of proviso to Sec. 219 of the Companies Act, 1956 i.e. a statement containing the salient feature of all the documents can be sent to shareholders instead of a full Annual Report Submission of Half Yearly Results instead of Quarterly Results No requirement of Publishing of Financial Results
Market Coverage Increased Value of the Shares Venture Capital Participation Exit Options
Distribution of Risk
Increased Financing
Liquidity for Shareholders Becoming a listed public limited company establishes a market for a company's shares, providing its investors with an efficient and regulated vehicle in which to trade their shares. Greater liquidity in the stock market can lead to better valuation of shares than would be seen through private transactions. Facilitate Growth Acquisitions Through Strategic Investments, Mergers And
Listed SMEs are more likely to get strategic investments from both, domestic and international investors as well as companies As a listed public limited company, its shares can be utilized as an acquisition currency to acquire target companies, instead of a direct cash offering. Using shares for an acquisition can be a cost- effective vehicle to finance such a transaction.
Other Aspects
Transparency, Efficiency and Liquidity Involvement of Market Participants Minimum Regulation and compliance requirements Attraction to high Net Worth Investors
BOARD OF DIRECTORS
DIR A DIR B
DIR C
DIR D
DIR E
COMPANY POLICIES
INVESTORS
CUSTOMERS
SUPPLIERS
LENDERS
DEPARTMENTS IN A COMPANY
CORPORATE PLANNING LEGAL FINANCE AND ACCOUNTS HUMAN CORPORATE PRODUCTION MARKETING AND OPERATIONS RESOURCES COMMUNICATION INFORMATION TECHNOLOGY
Leadership
Entrepreneurship
Approvals Required
Appointment of Intermediaries
By Company
By Intermediaries
Eligibility Norms
Contents of Prospectus
Pricing of securities
Promoters Disclosures
Migration
Unlisted Company
As PCS
As Advisor
As Represen tator
Brokers Audit Securities Audit Corporate Restructuring Capital Restructuring Unlocking companys real value
Thank You
Corporate Professionals Capital Pvt. Ltd SEBI Registered Category I Merchant Banker D-28, South Extension -I, New Delhi-110 049 Ph: +91.11.40622200; FAX: +91.11.40622201 Contact: Anjali Aggarwal Mobile: + 91 9971673336; Tel: +91.11.40622230 Email: anjali@indiacp.com