Securities and Exchange Board of India (Sebi) is likely to issue norms on separate stock exchange for small and medium enterprises next month. This will give the SMEs more options to raise funds.
Securities and Exchange Board of India (Sebi) is likely to issue norms on separate stock exchange for small and medium enterprises next month. This will give the SMEs more options to raise funds. At present SMEs majorly depend on banks and other financial institutions for funds.
In response to the industry’s demand for such a platform the government has made efforts by setting up two platforms for raising funds. In 1989, OTC Exchange of India was set up, while the Bombay Stock Exchange launched INDO NEXT Platform in 2005. But after these attempts failed to cater to SMEs, the government, Sebi and the industry made no further efforts.
In order to make it a safer platform for investors, Sebi had last year proposed to allow allocation of shares to retail participants only through mutual funds. It had also asked for comments on whether to fix a minimum investment size at the time of the initial public offer to allow only informed and well-researched investors into the market. This time, BSE, National Stock Exchange and MCX Stock Exchange have shown interest in setting up an exchange for SMEs.
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