NSE's renewed push for the SME platform

The National Stock Exchange (NSE) is all set to increase the number of listed companies on its small and medium enterprises trading platform.

At least ten companies are in the process of getting listed on the exchange this fiscal. This includes companies to be listed on the NSE Emerge platform through an initial public offering (IPO) and the NSE Emerge-ITP where companies are listed without an IPO.

“We expect NSE EMERGE to witness a significantly higher number of listings as the time goes by, - while keeping proper checks and balances in place,” said a NSE spokesperson in response to an email query.

However, sources in the industry said that the exchange was under tremendous pressure from the regulator to increase the number of listings on its SME platform.

Rival BSE’s SME platform consists of over 100 listings in the over three years of its existence. Some said that Sebi chief U K Sinha has been urging NSE to bolster the number of listings to provide fund-raising opportunities for SMEs struggling for capital, in an environment where interest rates are still high and bank are trimming lending activity as asset-qualities come under pressure.

NSE launched its SME platform in March 2012 but only managed to list its first firm, Thejo Engineering, in September of that year. So far, the platform has seen only seven IPOs, one of which – Veto Switchgears and Cables – has already migrated to the main exchange platform of the NSE.

NSE has always maintained that the fewer listings on its platform is a result of stringent listing norms.

“As an exchange we are more concerned about the quality of listing and its objective. Relatively small issue sizes may vitiate the Tier 1 Merchant Bankers and this may affect the quality merchant banking, which in turn can dissuade quality issues further leading to lack of interest among quality merchant bankers,” stated NSE’s email response.

National Stock Exchange of India Ltd (NSE)