Praxis Business School, Kolkata, India
Finally, Good days are ahead for 26 million small and medium enterprises in the country. BSE’s SME Exchange is planning to start operations. The Prime Minister's Task Force has recommended to set-up a dedicated Stock Exchange/ Platform for SME. SEBI has also laid down the regulation for the governance of SME Exchange/Platform. First SME Exchange in India will be started by BSE and followed by NSE, which has started preparation for launching its own SME Exchange.
Before going in to the discussion lets have a glance about SME Exchange. An SME exchange is a stock exchange dedicated for trading the shares of small and medium scale enterprises(SMEs) who, otherwise, find it difficult to get listed in the main exchanges due to initial capital raising constraint, which is 10 crore for NSE & 3 crore for BSE to get listed in the exchange. The concept originated from the difficulties faced by SMEs in raising money from the public due to lack of visibility.
Presently Small and Medium Enterprises are contributing 8% of our GDP and providing employment for around 6 crore people. The Micro Small and Medium Enterprise (MSME) sector forms the largest generator of employment in the Indian economy.
SEBI has also created separate listing conditions and waived some existing conditions.
There are many benefits of SME’s Exchange such as
Once the Exchange comes to operation accessing capital for SME’s will become much easier.
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