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bse-sme-exchangeTHMB.jpg SME Conclave -- awareness on SME stock exchange

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Bikky Khosla | 08 May, 2012
The long wait is over. Now it seems only a matter of time before the equity market opens up a big new world of opportunity to the Indian small and medium enterprise sector. With the country's two leading stock exchanges launching their respective SME exchanges recently, now our small entrepreneurs can explore the world of equity financing; but before taking that first step, I think it would wise for the sector to get prepared, understand where it can take us, and how it will benefit.

In order to spread awareness about these issues, recently Tradeindia.com, in collaboration with ET Now, organized a discussion -- SME Conclave -- at the Bombay Stock Exchange. The event, which saw participation by eminent speakers from the SME space, featured elaborate discussion on how BSE's recently launched SME Exchange could help unlock value for the SME ecosystem, thus making it a successful experience for us to be part of the first ever such initiative in the country. I think such efforts are the call of the time at this crucial juncture. Currently being telecast on Saturday 5th/12th/19th May, at 5.30 PM on ET Now (repeats Sunday 6th/13th/20th May, at 6.00 PM) the main objective of the conclave is to educate and inform SMEs of this very important and useful new development for their future growth plans.

It is a well-known fact that debt and equity capitals both are essential for a business, but unfortunately till now, Indian SMEs have to rely primarily on -- debt, particularly bank loans which, needless to say, most SMEs find significantly difficult to raise. Banks are usually hesitant to lend to them due to their higher risk profile owing to zero collateral or their limited years of operation. As a result, majority of SMEs prefer to approach alternative sources of capital, which are usually far more expensive and rarely a guaranteed source.

This needs to be countered, and I think setting up of the SME stock exchanges is a big step forward to address the sector's immediate need for finance. In some other parts of the world, several such platforms have already been operating -- one such example is Alternative Investment Market (AIM), operating as a part of the London Stock Exchange, and which since its launch in 1995, has attracted more than 3,000 small companies from across the globe to join it.

SME Exchange is a new thing for our SMEs, and I hope that they will take it as an opportunity to unlock the value of their business as well as team members. At the same time, preparedness is crucial. In the view of this, I think the telecast of the event -- SME Conclave, will answer many queries, which SMEs face in regard to SME stock exchange. The programme would help SMEs in getting some valuable insights into equity financing and how it would help unlock the value for the SME ecosystem in the country. 
 
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Bases to raise the fund
Rajesh Kumar | Fri May 18 04:57:50 2012
Its very good step taken to boost up the economy growth. But what will be the bases to raise the funds through SME exchange.


Formalities to list in SME stock exchange?
jack.. jahas.mm@gmail.com | Wed May 16 16:47:45 2012
Could any body please tell me, what are the formalities to list in SME exchange.. and whom we want to approach??


SME Exchange
JMC Jaggi | Wed May 16 06:19:53 2012
The BSE SME Exchange envisages a Merchant Banker operating a Market Making Exercise. Have we forgotten the Result of OTC Exchange. We have been a dealer on OTC and many scrips suffered on account of Market Making provision. Why not free the trading on SME Exchange like any other exchange. Unless that is done, many companies may not come forward. We have many companies ready for listing on SME Exchange but wish that manipulative techniques of Merchant Bankers may not spoil the party like in OTC Exchange of India. Book Building is a better exercise and the role of merchant bankers post issue should be reduced. Many more companies will be interested in that case.


SME Conclave
BIKASH SAHA | Wed May 16 04:37:44 2012
The programme SME Conclave would help SMEs in getting some valuable insights into equity financing and will definitely a giant step for the country and it will boost the economy.


SME Conclave
Syed Zahid Ahmad | Thu May 10 05:26:47 2012
Why not publish the minutes of SME Conclave to widespread it for those who miss ET NOW shows. Published minutes will always be available for readers. I would be pleased to link that to our website www.economicinitiatives.com Besides the SME Exchange, we also need Exchange for Micro Finance and Agriculture finance.

  Re: SME Conclave
Farooq Awan | Fri May 11 04:24:07 2012
I am delighted to know about SME Conclave.I support the idea for agri finance exchange.will he like to elaborate his idea on this page or on his website


Struggling for Finance
Hargovind | Wed May 9 16:05:34 2012
A Self Help Group based Lively Hood Project, now supported by a State Government is looking for its Vertical Expansion to meet Export Potential. A cheap source of Rs. 20 crore without collateral security is a must. The SME Exchange will be Blessed by the SHGroup. Thanks.


Net asset criteria a concern
parameswaran - babukiyer@gmail.com | Wed May 9 08:35:20 2012
Hi sir Its a fantastic move by the government. But few worrying clauses also in this new concept. Here mentioned net asset worth 1 cr only eligible to raise fund. SME means small and medium enterprises, which means above 25 lakh investment to 5 cr investment called small enterprises, here 1 crore net asset means within the sme sector itself they avoiding people who don't have asset worth 1 cr. Then they can't fully claim that its for all the SME sector.


Waiting this
kalyan | Wed May 9 07:07:59 2012
Great we are waiting this opening which will pave way for SMEs to come up in future.


Fantastic platform but . . .
Vinod | Wed May 9 05:14:32 2012
True, no doubt that it is a fantastic platform to raise capital for business. Both the exchanges (NSE and BSE) are trying hard to get companies listed on SME Exchange. But the issue is, due to compulsory market making and 100% hard underwriting, Merchant Bankers will quote a very high fee, which becomes very expensive. Especially when the issue size is smaller. May be it is better to raise Private Equity if the fund raise size is < Rs 50 crore. Also Investors have not tested water so not many investors will take the risk and invest on the new platform.

  Re: Fantastic platform but . . .
Syed Zahid Ahmad | Thu May 10 05:29:17 2012
Very true. Initially there should be mutual fund for SMEs which could be shared by SMEs so that risk could be shared


Programme an eye opener . . .
T.S.VISWANATHAN | Wed May 9 02:48:01 2012
Your editorial and information was highly useful to me as an SME entrepreneur in the dairy manufacturing and publishing. We manufacture products under the Brand Name SB. Our products are the life line for an economy. We are unable to raise finance especially from a bank like State Bank of India in spite of giving high value marketable security. They speak on rules , law points, etc. An exchange for SMEs would give opportunity for a small entrepreneur to go public. Instead of selling his business in bits and parcels like separate disposal of machinery or stocks he can sell his shares. This provides liquidity to his business because there are several entrepreneurs who would like to buy businesses as a whole realising value for both buyers and sellers. The big segment classic example is that of Satyam Computers, for if sold in bits and parcels it would have fetched nothing, but not it fetched the company Rs 2750 crores when share transfer was effected. SME exchange provides greater value to SME business for realising their locked values both in terms of raising equity and in terms of selling their business. Bank capital /loans were deplored by Dhirubhai who appealed to public for capital and rest is history. This can happen to several SME entrepreneurs when SME exchanges are opened. Your information that it is being telecast in ET Now in dates specified is an eye opener for me and I shall met respective friends to watch the program, which can give insight how to list/procedures.

  Re: Programme an eye opener . . .
Siddhartha | Tue May 15 06:46:55 2012
This is a great website with a fund of information. The SME exchange is however pipe dream. It is just a project by some manipulative individuals to gain visibility and further their vested interests. Let us develop a bond market first!


A big step towards giving SMEs a better chance
rob@i-optic.com | Wed May 9 01:10:35 2012
India is at war with its SMEs! Export rules and export corrupt practices as well as no access to non-equity-finance have opened the floodgates to Chinese imports, whilst simultaneously blocking Indian SMEs access to lucrative foreign markets. India's policies and border corruption are starving SME and willing workers. This is quite shameful. Therefore the new SME Exchange initiative is a big step towards giving SMEs a better chance. But without removing export corruption and onerous export paperwork and costs- this will in itself not amount to much. I can have a parcel sent from China to Australia for under Rs. 500. Try doing that from India and Rs. 5000 is still not enough. Also a true SME Exchange must have almost no barrier-to-entry admit any business structure. Forming boards and filling out prospectuses for investors costs on many exchanges between Rs. 50-100 crore and dooms SMEs. The Chinese on the other hand use government funds in a 'wild western- gung ho' style throwing it at anyone who showed skill and initiative. They also made imports exceedingly difficult and exports quick, cheap and corruption free. Today they are the factory to the world -- whilst India is at war with itself, starving itself, squabbling over petty exports stamps and petty bureaucrat corruption. I hope that the new Exchange will be open to the indomitable spirit of SME enterprises and start-ups, allowing failure and minimizing bureaucracy to form powerful new export earning SMEs and work for millions.


  Re: A big step towards giving SMEs a better chance
Syed Zahid Ahmad | Thu May 10 05:35:59 2012
It is the difference in cost of credit for Indian and Chinese SMEs that makes the big difference. China leads in international market because of access to credit at almost half rate what Indian SMEs need to pay. We cannot compete China unless like Chinese Government, our Indian Government arrange low cost credit or equity funds for our SMEs. Corruptions must not be tolerated at any cost.


A big step
rob@i-optic.com | Wed May 9 01:09:20 2012
Indian is at war with its SMEs. Export rules and export corrupt practices as well as no access to non-equity-finance have opened the floodgates to Chinese imports, whilst simultaneously blocking India's SME's access to lucrative foreign markets. India's policies and border corruption are starving SME and willing workers. This is quite shameful. Therefore the new SME Exchange initiative is a big step towards giving SMEs a better chance. But without removing export corruption and onerous export paperwork and costs- this will in itself not amount to much. I can have a parcel sent from China to Australia for under 500 rupees. Try doing that from India and 5000 is still not enough. Also a true Exchange must have almost no barrier-to-entry admit any business structure. Forming boards and filling out prospectuses for investors costs on many exchanges between 5o-100 Crow and dooms SMEs. The Chinese on the other hand used government funds in a 'wild western- gung-ho' style trowing it at anyone who showed skill and initiative. They also made imports exceedingly difficult and exports quick, cheap and corruption free. Today they are the factory to the world- Whilst India is at war with itself, starving itself, squabbling over petty exports stamps and petty bureaucrat corruption. I hope that the new Exchange will be open to the indomitable spirit of SME enterprises and start-ups, allowing failure and minimizing bureaucracy to form powerful new export earning SME's and work for millions


 
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