Bombay Stock Exchange Limited (herein referred to as “BSE”) has set up the BSE Start-up Platform as per rules and regulations laid down by the Securities and Exchange Board of India (herein referred to as “SEBI”). BSE Start-up Platform offers an entrepreneur and investor friendly environment, which enables the listing of Small and Medium Enterprises (herein referred to as “SMEs”) from the unorganized sector scattered throughout India into a regulated and organized sector. As on date, the market statistics are as under:
| Number of Companies Listed on BSE Start-ups till Date | 4 |
| Market capital of Companies Listed on BSE Start-ups till Date (INR in Crores.) | 65.38 |
| Total Amount of Money Raised till Date (INR in Crores.) | 19.00 |
Source: www.startupbse.com
Sectoral Analysis:
Salient Features of ‘BSE Start-up Platform’ listing:
Benefits of listing on BSE Start-up Platform:
Applicability:
The Company registered under Companies Act,2013 should have been in existence for at-least a period of two years on date of filing the draft prospectus with BSE.
and
The “Startup Companies” seeking to be listed on the BSE Start-up Platform should be in the sector of IT, ITeS, Bio-Technology and Life Science, 3D Painting, Space Technology, E-Commerce, Hi-tech Defence, Drones, Nano Technologies, Artificial Intelligence, Big Data, Augmented/Virtual Reality, E-gaming, Exoskeleton, Robotics, Holographic Technology, Genetic Engineering, Variable Computer Inside Body Computer Technology and other High-tech Industries.
and
The Company should be registered as a Start-up with MSME/DIPP Or If not registered as such, the Company’s paid-up capital shall be a minimum of INR 1 Crore.
Financial Criteria:
- The net worth should be positive.
- Preferably, there should be investment by QIB Investors [as defined under SEBI ICDR Regulations, 2009]/Angel Investors/Accredited Investors for a minimum period of 2 years at the time of filing of a draft prospectus with BSE.
- In case Company is not registered as a start-up with MSME / DIPP, the company’s paid-up capital should be minimum INR 1 Crore.
- The post-issue paid-up capital of the company [face value] shall not be more than INR 25 Crores.
Other Requirements:
- It is mandatory for a company to have a website.
- It is mandatory for the company to facilitate trading in Demat securities and enter into an agreement with both the depositories.
- There should not be any change in the promoters of the company in preceding one year from the date of filing the application with BSE for listing under the Start-up segment.
Disclosures:
A certificate from the Applicant Company I Promoting Companies stating the following:
- The Company has not been referred to National Company Law Tribunal [NCLT] under Insolvency and Bankruptcy Code,
- There is no winding-up petition against the company that has been accepted by the National Company Law Tribunal [NCLT].
- None of the Promoters / Directors of the company has been debarred by any regulatory agency/ies.
Compliance on BSE Start-up Platform:
Preparation for IPO:
IPO is one of the means of financing and an important method to raise funds for any corporate aspiring for sustained growth. It is thus important that every company is aware of the requirements and the kind of preparation required before entering the capital market.
An overview of the process of IPO and activities are listed below:
Migration from BSE Start-up Platform to the Mainboard:
- Companies seeking migration to Main Board of BSE should satisfy the eligibility criteria.
- It is mandatory for the company to be listed and traded on the BSE Start-ups Platform for a minimum period of two years and then they can migrate to the Main Board as per the guidelines specified by SEBI vide their circular dated l5th May 2010 and as per the procedures laid down in the ICDR guidelines Chapter X.
Key Comparison between BSE Start-up IPO listing and BSE SME IPO listing:
| Particulars | BSE Startup IPO listing | BSE SME IPO listing |
| Applicability | The company incorporated under Companies Act,2013 | The company incorporated under Companies Act,1956 or existing Partnership/LLP converted to Company under Companies Act, 2013 |
| Pre-IPO paid-up capital threshold | INR 1 Crore | INR 3 Crores |
| Track record | At least 2 years | At least 3 years |
| Funding criteria for applicability | Investment by QIB Investors | Angel Investors |Accredited Investors for a minimum period of 2 years at the time of filing of a draft prospectus with BSE | Funded by way of loan/equity by Banks or Financial Institutions or Central or State Government or its undertaking, or Its Group Company should have been listed for at least two years either on the Main Board or SME Board of the Nationwide Exchange. |
| Cap on Cash Accruals (Earnings before Interest and Depreciation) | No limit | Positive |
| Disclosure condition as regards Promoters/Directors for bringing transparency and Integrity amongst management | None of the Promoters /Directors of the company has been debarred by any regulatory agency/ies | No specific Condition |
| Specific condition for Migration to Mainboard | the minimum period of two years on BSE Start-up Platform | paid-up capital of more than 10 Crores + Market Capitalisation should be minimum INR 25 Crores |
Other Income tax concessions to Start-ups:
How can Incorp India help you?
At InCorp India, we are committed to delivering quality in assurance, tax, and advisory services. We have curated an MSME suite to provide various benefits for MSMEs. Our combined dedicated team of Corporate Advisory, Valuation, Investment Banker, and Taxation experts can help you plan and prepare for IPO, conceptualizing the process, pre and post-issue compliance, and provide the ease for filing the required compliances. We can assist you not only in terms of compliance but also to evaluate the eligibility of listing, valuation principle specific to business by evaluating cost-benefit analysis. If you are interested in knowing the benefits available to MSMEs and Startups and related assistance, you can write to you on ‘info@incorpadvisory.in’.
