From insolvency to PAT, know about NSE’s migration policy for SME-listed firms

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The new framework will be implemented on the companies who seek to migrate from NSE’s small and medium enterprise (SME) platform to the main board.

Other than setting minimum number of public share holders, the bourse has also made it mandatory for the applicant company to have positive cash accruals (earnings, before interest, depreciation, and Tax).  The company should have to maintain the threshold number of public shareholders on the last day of the preceding quarter from the date of application.

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The companies willing to move to the main board are also required to have positive profit after tax (PAT) in the immediate Financial Year of making the migration application to exchange. 

Other criteria set by the leading stock exchange include, the applicant should not be referred to the Board of Industrial and Financial Reconstruction (BIFR) and there should be no proceedings admitted under Insolvency and Bankruptcy Code (IBC) against the issuer and promoting companies. 

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In addition to that, the company should not receive any winding-up petition admitted by the NCLT. The framework also notifies the minimum paid-up equity capital of the applicant company, which need to be at least ₹10 crore. The capitalisation of the applicant company’s equity should not be less than ₹25 crore.

Other than this, it is mandatory for the applicant company to disclose all material litigation and regulatory action to the stock exchanges where its shares are listed in an adequate and timely manner.

Launched in 2012, NSE’s SME platform was an initiative to help small and medium-sized companies and startups to raise capital from the stock market. These companies can get listed on NSE without IPO.