This was announced by Manoj Vaish, chief executive officer (CEO) and executive director (ED), BSE, at a press conference on Monday. The Securities and Exchange Board of India (Sebi) has already given its nod for the new BSE scheme where new enterprises, small private companies and companies listed on regional stock exchanges (RSEs) can list their securities on the exchange, he added.
Currently, the smaller companies raise money through initial public offerings (IPOs) and get listed on RSEs, which virtually have no trading activity.
With the new norms, a new company with a proven track record will be able to get listed easily in the B2 group of BSE initially. Later, it would be transferred to the to-be-constituted S group, which will become operational by October-end, Dr Vaish said.
Meanwhile, BSEs earlier plan to introduce a common trading platform for small-cap companies through a merger of RSEs via Indonext, wherein all RSEs can trade in a segment of BSE, is in the pipeline and would take another six months to commence trading activity, said Dr Vaish.
For trading in the S group, the company has to be listed on BSE, while in the Indonext, the company can remain listed on RSE.
Dr Vaish said, Overall, in this new segment we dont expect to earn higher revenue than the cost we are going to incur. It is our duty to provide this facility to small-cap companies which will have low turnover and earn us only a few lakhs of rupees.
Explaining the other criteria for listing, Dr Vaish said that if the company does not have a profit track record, the project must be appraised by a financial institution (FI) or a qualified institutional buyer (QIB). If the QIB does not show any interest, the listing will not be allowed. The issue would be through the book-building route and at least 50 per cent should be allotted to the QIB.
The due-diligence for such small-cap companies would be done by an exchange-appointed team of CAs or merchant bankers. The minimum number of public shareholders required for such issues is 500 and the company will be required to hold a shareholders meeting at least once in a year in Mumbai, Dr Vaish added.