SME Exchange: Direct listing of startups without the need for IPOs as a separate SME segment

The launch of the SME Exchange last year was a milestone for accessing Equity capital by the MSMEs.

However, procedural and cost implications for listing in the current framework may not be suitable for a large number of SMEs although, they might otherwise benefit from better access to potential investors which can be gained through listing.

In this regard, a dual approach may be taken to enable easier fund raising by startups and SMEs.

i. Enable direct listing of startups without the need for IPOs as a separate SME segment. (This has also been one of the key announcements by the Hon’ble Finance Minister in the Union Budget 2013-14.)

ii. The present SME segment may be suitably modified to enable more eficient fund raising.