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BSE to launch SME Exchange by March end

Bombay Stock Exchange (BSE) may start operation of its SME Exchange in the first week of March. The Exchange had first announced its intention to begin operations as early as November last year.

Capital market regulator Securities and Exchange Board of India (SEBI) had given its clearance to the dedicated stock exchange, aiming to help SMEs resolve the start-up issue.

“The process is on and we are trying to launch it within this fiscal year. As per our estimates we should have a minimum of 500 SMEs listed in the next three years,” said BSE SME Exchange CEO Lakshman Gugulothu on the sidelines of a programme organized by industry body CII.

According to Gugulothu the bourse will soon initiate talks with mutual fund houses, qualified institutional buyers and banks for investing in the SME exchange, and around 8-10 applications are on the draft stage.

He added about 30 to 40 companies had signed the mandate with merchant bankers. Some others were in the advanced stages of discussions with merchant banks and market makers.

The basic criteria for listing on the exchange would be a minimum of 50 investors and Rs.5 million paid up capital post-Initial Public Offer (IPO).

For companies with Rs.5 million to Rs.100 million paid-up capital, listing would be compulsory. Companies with paid-up capital between Rs.100 million and Rs.250 million, would have the option of listing on either the SME exchange or the main board.