Availability of Financing Options for SMEs, Listing and Operations of SME Exchange

2

BSE – Home to SME Companies

2702

1326991

0

500

1000

1500

2000

2500

3000

No.

of C

ompa

nies

Less than Rs. 10 Crs Above Rs. 10 Crs < Rs. 25 Crs Rs. 25 Crs and above

3

Financing Options for SMEs

4

Regulatory Framework

Whether there existed a regulatory framework that

allowed SME companies to access public?

5

Different Packaging

No SEBI filing and vetting process, but only with the Exchanges – WOW !!!

Diluted regulatory requirement – No SEBI eligibility criteria No IPO grading Lower no. of minimum allottees Lower continuing listing requirements

Opportunity available for migrating to main board

6

Providing Safeguards

Participation only by investors willing to invest minimum of Rs. 1 lac

Mandatory market making for a period of 3 years from date of listing

100% underwriting

7

BSE Eligibility criteria

Net Tangible Asset of atleast Rs. 1 crore Net worth of atleast Rs. 1 crore Minimum post issue paid up capital of Rs. 1 crore Track record of distributable profits in 2 out of 3

preceding financial years

OR

Minimum Net worth of Rs. 3 crores

8

BSE’s Endeavour to encourage this segment

Extensive awareness programs across India with various industry chambers, professional bodies etc.

Dedicated website www.bsesme.com Research report coverage on companies listed on

SME Lower costs of listing

9

SME’s apprehensions

Lack of familiarity of capital markets Family owned structures and fear of losing control Costs and fulfillment of regulatory requirements

during and after IPO Lack of investors and existing uncertainties

surrounding success of offering after paying initial costs

10

Statistics

Details SME Market

Number of Listed Companies 8

Market Capitalization (Rs. Crores) 171.02

Daily Average Turnover for Sept 2012 (Rs Crores) 0.59

Sectors Number of issuers

Market capitalization(Rs Cr – Sept 2012)

Finance 4 70.54Capital Goods 1 52.02Healthcare 1 25.50Information Technology 1 14.97Miscellaneous 1 7.99

11

Issue Costs as per offer document

Issue Costs Rs. In lacs % of issue cost

Payment to Merchant Banker including fees and reimbursements of selling commissions brokerages, payment to other intermediaries such as legal advisors, registrars, bankers etc and out of pocket expenses

36.98 63.96

Advertising and marketing expenses 5.00 8.65Printing and Stationery (incl. distribution) 7.50 12.97Other (Regulatory fees and other expenses)

8.34 14.43

Total 57.83 100.00

© Experian Limited 2007. All rights reserved.Confidential and proprietary.