SME exchange: BSE emerges market leader

 The Bombay Stock Exchange has emerged as the market leader in SME segment with more than 90 percent market share, said an official on Monday.   

"BSE has emerged as the market leader in SME segment with more than 90 per cent market share in this segment. With innovations, technology, investor focus, good services and higher wealth creation, SMEs and investors in SME are preferring BSE SME platform," BSE MD & CEO said Ashishkumar Chauhan told a news agency in Mumbai.

While 17 companies were listed in BSE  since the launch of the SME platform last year and nine more are in the process of listing their shares by March 31 this year, the rival NSE had listed three companies so far on its SME exchange platform.

Both the platforms were launched in March 13, 2012. The market regulator, Securities and Exchange Board of India (SEBI) accorded approval to the SME Exchange by BSE in September 2011.

The concept of the these SME exchanges is similar to that of Over-The-Counter Exchange of India (OTCEI) and the BSE IndoNext, two previously launched SME exchanges which was unsuccessful due to poor market participation.

The process of launching an IPO for listing on the SME exchange can be completed within 2-3 months, against the 8-9 month time frame required for the BSE. Another interesting feature of the exchange is that financial results of the companies listed on it can be submitted on a half-yearly basis instead of quarterly basis.

In Budget 2013, a proposal has been included to ease SME exchange listing norms by permitting start-up companies to list on the exchange without going through the elaborate process of making an initial IPO. This would help facilitate investments for innovative and young start-ups.

The merchant bankers have an additional role in the SME exchange. They have been assigned the role of market makers and have to handhold the company for three years. They would have to hold five per cent of the security to be listed at the time of allotment to do the market making.

As per the data provided by BSE, out of 17 listed companies only two companies, namely RCL Retail and Bronze Infra-Tech, are quoting at Rs 9.3 and Rs 8.7, below their issue price offer of Rs 10 and Rs 15, respectively.

However, shares of Looks Health Services gave handsome return as it is quoting at Rs 214 against the issue price of Rs 40 per share. Max Alert Systems is also quoting higher at Rs 92 against its issue price of Rs 20.

Among other shares, BCB Finance is quoting at Rs 25.1 (issue price of Rs 25), Sangam Advisors at Rs 22 (Rs 22), Jupiter Infomedia at Rs 23.8 (Rs 20), Jointeca Education Solutions Rs 15 (Rs 15), SRG Housing Finance Rs 21.75 (Rs 20), BSE data said.

Besides, Comfort Commotrade quoting at Rs 27.25 (Rs 10) Anshu Clothing Rs 31.55 (Rs 27), Eco Friendly Food Processing Rs 35.85 (Rs 25), Esteem Bio Organic Food Processing Rs 51.95 (Rs 25), Kavita Fabrics Rs 40.85 (Rs 40), Sunstar Realty Development Rs 24.75 (Rs 20), Channel Nine Entertainment Rs 27.55 (Rs 25) and HPC Biosciences Rs 41.05 (Rs 35), according to the data.

"We are successful in wealth creation for SME sector and in turn for the economy as a whole," Chauhan said.