1
SME Platform
Listing with an IPO
Institutional Trading Platform
Listing without an IPO
2
EMERGE symbolises the aspirations of a large number of entrepreneurs participating in the “India growth Story” and
having potential to unlock value and emerge on a bigger stage.
SME PLATFORM
3
Thejo Engineering Ltd (Chennai)
Business: Bulk material handling products & Services
Funds raised: Rs.19 crore
Turnover (March 31, 2013 / 2014): Rs 134.34cr / Rs 149.22cr
Veto Switch Gears and Cables Ltd (Jaipur)
Business: Manufacture and sale of wires & cables and electrical accessories
Funds raised: Rs.25 crore
Turnover (March 31, 2013 / 2014): Rs 74.13 cr / Rs 94.47 cr
IPOs on Emerge
Opal Luxury Time Products Limited (Pune)
Business: Leading domestic brand of Luxury wall and table clocks in India
Funds raised: Rs.13 crore
Turnover (March 31, 2013 / 2014): Rs.22.69 cr / Rs.24.99 cr
4
Mitcon Consultancy and Engineering Services Ltd
Business: Technical consultancy and engineering services
Funds raised: Rs.25 crore
Turnover (March 31, 2013 / 2014): Rs.46.67 cr / Rs. 40.49 cr
Sanco Industries Limited
Business: Manufactures Rigid PVC Conduit Pipes, Casing & Capping, Insulated Domestic Wires & Cables etc
Funds raised: Rs.4.32 crore
Turnover (March 31, 2013 / 2014): Rs.58.58 cr / Rs.66.34 cr
Momai Apparels Limited
Business: Manufacturing of garments
Funds raised: Rs. 43.00 crore (including Pre-IPO of 13 cr.)
Turnover (March 31, 2014): Rs. 117.45 cr
Need for Capital
5
Capital
Sustainable Growth
Innovation
ExpansionDiversification
Acquisition
MSME Finance life cycle
6
Start-upsPromoter
owned• Owner’s capital
• From friends and family
Early stage
Debt and Venture investor
stake
• Govt Seed capital schemes
• Long term debt
• Angel funding ( Angel Networks) / VC funds
Large companyNew investors –
widely distributed
• Main board: Retail, institutions
Growing phase
More external investors
(VC may exit)
• Private equity
• SME Platform: HNIs, Institutions
Why list on SME Emerge ?
Alternate Valuation.
Price preservation
Repeated rounds of capital
Listing on main board after attaining
serious size and with a more broad
based offering
ESOPS to attract and retain talent
Stock as currency for acquisitions
Recognition & Visibility
Clients, Vendors & community
SME PLATFORM
SME PLATFORM
Regulatory Framework
Regulatory framework
9
• Regulated by SEBI
• Separate segment in NSE
• Same trading members and merchant bankers as main exchange.
• Same trading terminals as main board
Emerge platform
status
• Issuer’s Post issue paid up capital- Rs 10-25 crore : SME/ main Board - < Rs 10 crore : SME Board only
• 3 year operational history and 2 year positive cash accruals
Issuer criterion
• Minimum application size: Rs. 1 lakh
• Minimum trading lot : Rs. 1 lakh
• Nominated investors (PE funds & QIBs) can support underwriting and market making
Investors
10
• Min 50 allottees. Dilution : at least 25%.
• DRHP in same format. Only exchangeobservations. No grading requirement
• 100% underwriting.
• Market making for three years
IPO on EMERGE
• Half yearly audited accounts instead of quarterlyon main board
• Corporate governance norms same as main board
Post listing compliance
• Migration from SME to main board and mainboard to SME allowed subject to conditions.
Migration
Regulatory framework
Admission Process
11
•Submission of DRHP by MB to the Exchange after complyingwith all due diligence requirements
Merchant Banker Due diligence
•Exchange examines DRHP, conduct onsite diligence andmanagement discussion•Third party due diligence and IPO Grading by Exchange•Provide observations/ seek clarifications
• Grant In-principle approval
Exchange In- principle approval
•Submission of final prospectus with details of underwriting &market making arrangements•Final approval accorded by Exchange
Final approval
Transparent Efficient Credible
12
EMERGE: INSTITUTIONAL TRADING PLATFORM
EMERGE-ITP is only for listing of securities – there shall be no public offer for raising capital.
Who can list?
• Atleast 1 year’s audited financial
statements;
• Not been incorporated for more than 10
years
• Revenues < Rs.100 crore in any of the
previous financial years;
• Paid up capital < Rs.25 crore
• Cleared standard hygiene factors (such as
defaulter list, BIFR etc)
• Atleast one AIF, VCF, and other approvedcategory of investors / lenders (min Rs.50lakh)
• Atleast one or more 'Association of AngelInvestors' (min Rs.50 lakh)
• A scheduled bank for project financing orworking capital (min 3 years elapsed andfunds are utilised)
• A registered merchant banker hasundertaken due diligence and has invested(min Rs.50 lakh & lock-in for 3 years fromlisting. )
• A QIB, has invested (min Rs.50 lakh & lock-infor 3 years from listing. )
• A specialized international multilateralagency or domestic agency or a publicfinancial institution
13
Company hasCompany has received funds from either of the following:
Why List on EMERGE-ITP?
Higher visibility & credibility - more attention frompotential investors, clients, vendors & community
Lesser dilution - promoters of growing companiescan dilute smaller stakes to informed investors
Setting the stage – getting used to compliancerequirements and setting the stage for a fund raisingin future
ESOPS - to attract and retain talentM&A - Stock as currency for acquisitions
Promoters'
share
Investors' share
14
• The company seeking listing will have to file an Information Memorandum
(IM) with the exchange.
• The SE shall make the IM available on the website of the stock exchange for
public comments, atleast twenty one days prior to listing.
• The recognised stock exchange may issue an in-principle approval letter
• The company which has received in-principle approval will be exempt from
the requirement of having minimum 25% dilution.
• All securities of the company shall be in dematerialized form
• The minimum trading lot on institutional trading platform shall be ten lakh
rupees.
Other important aspects
15
Voluntary
• Special resolution
• SE Approval
Growth
• 10 yrs on ITP, or
• Paid cap > Rs.25 cr, or
• Revenues > Rs.300 cr, or
• Market cap > Rs.500 cr
Exit from Emerge-ITP
16
•Start-ups and SMEs listing on ITP are expected to grow and as they
mature they will need to raise capital on the other platforms, for which
they need to exit ITP.
•Exit from ITP can be in any of the following routes (other than
disciplinary action):
Thank You
NATIONAL STOCK EXCHANGE OF INDIA LIMITEDExchange Plaza, Bandra Kurla Complex, Bandra (E),
Mumbai 400051, IndiaTel: + 91 22 26598100/ 66418100
Fax: + 91 22 26598120Web Site: www.nseindia.com
17