Guidelines for Migration of SME to Mainboard

Guidelines for Migration of SME to Mainboard
Published on: February 08, 2024

SME IPO listing comes with many benefits. One of the key benefits is that post listing if the Company meets the eligibility criteria for migration to mainboard, it can shift to mainboard on fulfiling come conditions. 

To do so, the listed SME company (listed on the SME platform) that wants to migrate to Mainboard IPO must adhere to specific regulations as chalked out by SEBI & also stock exchanges. Firstly, it is essential to understand whether the migration to the Mainboard is compulsorily or voluntarily. So, SEBI states:

  • SME company having paid-up capital of less than Rs 10 crores stays SME
  • If the paid-up capital is between Rs 10 crores to Rs 25 crores, then the company can opt for a mainboard IPO voluntarily
  • If the paid-up capital exceeds Rs 25 crores, then the company has to be migrated compulsorily to the Mainboard

NSE Emerge and BSE SME have different guidelines which need to be adhered to for migration. Understand these guidelines.

Parameter

NSE

BSE

Paid up capital and market capitalisation

a. Paid up capital is equal to or more than Rs 10 cr.
b. Market capitalisation is equal to or more than Rs 25 cr.

a. Paid up capital is equal to or more than Rs 10 cr.
b. Market capitalisation is equal to or more than Rs 25 cr.

 

Capitalisation= Price * Post Issue no. of equity shares
(Price= average
of the weekly high and low of the closing prices of the related shares
quoted on the stock exchange during 3 months preceding the application
date)

Capitalisation= Price * Post Issue no. of equity shares
(Price= average
of the weekly high and low of the closing prices of the related shares
quoted on the stock exchange during 3 months preceding the application
date)

Promoter Holding

-

Promoter(s) shareholding shall be at least 20% of equity share capital of the company at the time of making application.

EBITDA

Positive EBITDA for each of the 3 financial years preceding the migration application.

Positive EBITDA for any 2 out of 3 financial years preceding the migration application.

PAT

Positive PAT in the immediate Financial Year of making the migration application to Exchange.

Positive PAT in the immediate Financial Year of making the migration application to Exchange.

Listing Period

listed on the SME platform of the Exchange for at least 3 years.

listed on the SME platform of the Exchange for at least 3 years.

Net Worth

Equal to or more than Rs 50 cr

Should have a Net worth of at least Rs 15 crores for 2 preceding full financial years.

No. of Public shareholders

Total number of public shareholders on the last day of preceding quarter
from date of application should be at least 1000.

Total number of public shareholders on the last day of preceding quarter from date of application should be at least 250.

Other Conditions

a.  Company has not referred to the Board of Industrial & Financial Reconstruction (BIFR)
b. No proceedings have been admitted under Insolvency and Bankruptcy Code against the issuer and Promoting companies.
C.  The company has not received any winding up petition admitted
by a NCLT.

a.No material regulatory action in the past 3 years like suspension of trading against the applicant company, promoters/promoter group by any stock Exchange having nationwide trading terminals.
b. No Debarment of company, promoters/promoter group,
subsidiary company by SEBI.
c. No Disqualification/Debarment of directors of the company by any regulatory authority.
d.  The applicant company has not received any winding up petition admitted by a NCLT.
e. No pending defaults in respect of payment of interest.
f. No pending investor complaints.
g.   Cooling off period of 2 months from the date the security has come out of trade-to-trade category or any other surveillance action.

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