Sme exchange

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  • © Altacit Global 2009 Email: info@altacit.com
  • Sme exchange

    1. 1. CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, SME EXCHANGE Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 Lakshminarayanan Alaguraja Advocate Altacit Global EMAIL info@altacit.com WEBSITE www.altacit.com
    2. 2. SME EXCHANGE CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, Chennai - 600 004. An SME exchange is a stock exchange Tel: +91 - 44 - 2498 4821 BANGALORE dedicated for trading the shares of Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE small and medium scale enterprises (SMEs) who, otherwise, find it difficult BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 to get listed in the main exchanges. EMAIL info@altacit.com WEBSITE www.altacit.com
    3. 3. STOCK EXCHANGE CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, A stock exchange provides services for stock brokers and traders to trade stocks, bonds, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, and other securities. Stock exchanges also provide facilities for issue and redemption of Raheja Towers, 26-27, M G Road, Bangalore - 560 001. securities and other financial instruments, Tel: +91 - 80 - 6546 2400 COIMBATORE and capital events including the payment of BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. income and dividends. Securities traded on a Tel: +91 - 422 – 6552921 stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds. EMAIL info@altacit.com WEBSITE www.altacit.com
    4. 4. STOCK EXCHANGES IN INDIA CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, Chennai - 600 004. (a) National Stock Exchange (NSE) of India Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, (b) Bombay Stock Exchange (BSE) of Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, India # 48, Race Course Road, (c) Regional Stock Exchanges (RSE) of Coimbatore - 641018. Tel: +91 - 422 – 6552921 India EMAIL info@altacit.com WEBSITE www.altacit.com
    5. 5. Over-The-Counter Exchange Of India - OTCEI CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, The OTC Exchange of India (OTCEI), set up in 1990, was the first exchange for small Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, companies. However, OTCEI was ahead of its time and some of the modalities were new Raheja Towers, 26-27, M G Road, Bangalore - 560 001. to the market and were not conducive, and Tel: +91 - 80 - 6546 2400 COIMBATORE hence failed. BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com
    6. 6. INDUSTRY CONCERNS CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, Chennai - 600 004.  The cost of raising capital for SMEs is quite high. Tel: +91 - 44 - 2498 4821  The current means of financing for SMEs are not adequate BANGALORE Suite 920, Level 9, as they do not have easy access to funds from Angel Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Investors, VCs and PE players. Tel: +91 - 80 - 6546 2400  Most costs of compliance in raising capital under the COIMBATORE BB1, Park Avenue, existing guidelines are fixed. As a result, the costs become # 48, Race Course Road, Coimbatore - 641018. burdensome for smaller issues Tel: +91 - 422 – 6552921  The SMEs should be provided a framework that would enable them to raise capital quickly and at a low cost.  Owing to small size and less affordability, the eligibility conditions, listing requirements, corporate governance norms and disclosure standards may need to be suitably EMAIL info@altacit.com relaxed for SMEs. WEBSITE www.altacit.com
    7. 7. INTERNATIONAL EXPERIENCE CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, • Some of the known markets for SMEs are Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 – AIM (Alternate Investment Market) in UK, BANGALORE Suite 920, Level 9, – TSX Ventures in Canada, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. – GEM (Growth Enterprise Market) in Hong Tel: +91 - 80 - 6546 2400 COIMBATORE Kong, BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. – MOTHERS (Market of the high-growth and Tel: +91 - 422 – 6552921 emerging stocks) in Japan, – Catalist in Singapore and the latest initiative in China - Chinext. EMAIL info@altacit.com WEBSITE www.altacit.com
    8. 8. SEBI CHENNAI3rd Floor, ‘Creative Enclave’, • “SME exchange” is defined in Chapter XA of the148-150, Luz Church Road, Mylapore, Chennai - 600 004. Securities And Exchange Board Of India (Issue Tel: +91 - 44 - 2498 4821 BANGALORE Of Capital And Disclosure Requirements) Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Regulations] as a trading platform of a Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 recognized stock exchange or a dedicated COIMBATORE BB1, Park Avenue, exchange permitted by SEBI to list the securities issued in accordance with Chapter XA of SEBI # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 (ICDR) Regulations and this excludes the Main Board (which is in turn is defined as a recognized stock exchange having nationwide trading terminals, other than SME exchange). EMAIL info@altacit.com WEBSITE www.altacit.com
    9. 9. TO BE LISTED CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, The post-issued paid up capital of the company should not exceed Rs. 25 Crores. Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, This means that the SME exchange is not limited to the Small and Medium Scale Raheja Towers, 26-27, M G Road, Bangalore - 560 001. enterprises which are defined under The Tel: +91 - 80 - 6546 2400 COIMBATORE Micro, Small And Medium Enterprises BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Development Act, 2006 as enterprises where Tel: +91 - 422 – 6552921 the investment in plant and machinery does not exceed Rs. 10 crores. EMAIL info@altacit.com WEBSITE www.altacit.com
    10. 10. TO GET LISTED IN THE MAIN BOARDS CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, National Stock Exchange, the minimum paid up capital required is Rs. 10 crores and that Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, of Bombay Stock Exchange is Rs. 3 crores. Hence, those companies with paid up capital Raheja Towers, 26-27, M G Road, Bangalore - 560 001. between Rs. 10 crores to Rs. 25 crores has Tel: +91 - 80 - 6546 2400 COIMBATORE the option of migrating to the Main Board / BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. or to SME exchange. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com
    11. 11. DISTINCT BENEFIT CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, SME Exchange has distinct benefit in terms of Mylapore, Chennai - 600 004. listing and other fees which would be about half Tel: +91 - 44 - 2498 4821 BANGALORE of what the main board charges. SME Exchange Suite 920, Level 9, Raheja Towers, 26-27, M G Road, will help SMEs towards wealth creation by the Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 SMEs, through inclusive economic growth, COIMBATORE BB1, Park Avenue, unleashing valuations and, also, creating wealth for all stakeholders, besides considerable income # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 tax benefits and the facility to exit at any point of time. EMAIL info@altacit.com WEBSITE www.altacit.com
    12. 12. MINIMUM SIZE OF IPOS CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, There is need for 50 investors and each shall invest Rs. one lakh, amounting to Rs. 50 lakhs. This is post Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, IPO paid up capital on lower side. This includes the promoter shareholding, besides the investments by Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 the investors. Hence, it can be concluded that the COIMBATORE BB1, Park Avenue, # 48, Race Course Road, minimum size of the IPO can be less than Rs. 50 Coimbatore - 641018. Tel: +91 - 422 – 6552921 lakhs also. EMAIL info@altacit.com WEBSITE www.altacit.com
    13. 13. DOCUMENTS REQUIRED CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, • Keeping the Annual Reports on accounts ready Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 • Documenting the Past performance BANGALORE • Due diligence on the applicability of various regulations Suite 920, Level 9, Raheja Towers, • Due Diligence on the various approvals required from regulatory 26-27, M G Road, Bangalore - 560 001. bodies Tel: +91 - 80 - 6546 2400 • Documenting the Risk factors associated with the company COIMBATORE BB1, Park Avenue, # 48, Race Course Road, • Documenting the External environment effecting the company Coimbatore - 641018. Tel: +91 - 422 – 6552921 • Listing out of litigations and documenting its magnitude and ramifications • Documenting the Business activity • Documenting the Material contracts and agreements • Detailed report on promoters & management EMAIL info@altacit.com WEBSITE www.altacit.com
    14. 14. CONCLUSION CHENNAI3rd Floor, ‘Creative Enclave’, the concept of SME exchange is new to the public148-150, Luz Church Road, Mylapore, Chennai - 600 004. and not many SMEs in IT channels know it thoroughly. It is also clear that listed SMEs will Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, attract more investors for better access to alternate funding. Banks, financial institutions will provide 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE them the loans very easily. The major challenge BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. therefore is to instill confidence among SMEs and Tel: +91 - 422 – 6552921 get them listed. The execution also poses a challenge where shares listed on the exchanges are often less known and may also give rise to frauds. EMAIL info@altacit.com WEBSITE www.altacit.com
    15. 15. CHENNAI3rd Floor, ‘Creative Enclave’,148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821 BANGALORE Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400 COIMBATORE BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 – 6552921 EMAIL info@altacit.com WEBSITE www.altacit.com

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