Credit and Finance for MSMEs: The relaxation comes days after the Finance Minister Nirmala Sitharaman announced Rs 50,000 crore equity infusion for MSMEs through Fund of Funds to encourage units to list on the main board of stock exchanges.
Credit and Finance for MSMEs: Bombay Stock Exchange (BSE) on Monday announced that it has reduced the annual fee for listing on its SME exchange – BSE SME by 25 per cent to encourage small businesses to list and support them amid Covid impact. BSE SME, launched in March 2012, charges Rs 25,000 or 0.01 per cent of the full market cap of the company, whichever is higher, in annual fees. The revised fees will be applicable for both existing and upcoming small businesses to be listed on the platform. The relaxation comes days after the Finance Minister Nirmala Sitharaman announced Rs 50,000 crore equity infusion for MSMEs through Fund of Funds to also encourage units to list on the main board of stock exchanges. The support was part of the around Rs 3.7 lakh crore stimulus package announced by the minister to revive Indian MSMEs.
“We hope that these measures along with the bold steps taken by the government will help in reviving the SMEs and also encourage thousands of SMEs to go for listing,” said Ajay Thakur, Head – BSE SME & Startups in a statement. Amid Covid outbreak, three SMEs and one startup were listed on BSE SME & Startups platforms. Overall, 322 companies are listed so far on BSE SME while 79 businesses have been able to migrate to the main board. The 322 small businesses have raised Rs 3278.84 crores from the market with a combined market cap of Rs 15,865.39 crores as on May 17, 2020. On the BSE Startups platform, five startups have raised Rs 19 Crores and have a total market cap of Rs 76.09 crores.
The Fund of Funds announced by Sitharaman will be set-up with a corpus of Rs 10,000 crore and will operate through a Mother Fund and few daughter funds. MSME Minister Nitin Gadkari earlier this month in a video conference with the members of the Chartered Accountant Association of India had said that the government is eyeing 10X increase in the corpus to Rs 1 lakh crore in three-four years. The minister has repeatedly urged small businesses with AAA credit rating to list on stock exchanges to raise capital instead of bank debt. The government will purchase 15 per cent of the amount raised by MSME as equity stake from the Fund of Funds. For example, Rs 7.5 crore in equity will be purchased by the government if the MSME raises Rs 50 crore.