The BSE SME segment has helped 309 companies to raise 3237crs.These companies has created a valuation of 18000cr, said Ajay Thakur, Head- BSE SME at BSE Ltd, Mumbai, in an exclusive interview with SME Times.

Excerpts of the interview...

Please tell our readers about evolution of the BSE SME segment.

SMEs are the backbone of Indian Economy. This is reflected in the form of their increasing number and rising proportion in the overall product manufacturing, employment, technical innovations and promotion of entrepreneurial skills. In India, MSME sector is the second largest employer, after agriculture accounting for 80 million plus jobs. With the Indian economy growing, the need of SMEs to raise capital is becoming increasingly critical. Thus, the creation and conservation for SMEs becomes inevitable. Therefore a specialized capital market segment was needed to be in place that can provide risk capital for promising entrepreneurs, promoting innovation crucial for sustainable economic growth. With this objective and as per the recommendation of Prime Minister Task Force, SEBI has come out with detail guidelines on SME Exchange through their various notices dated 18th May, 2010, 26th April, 2010 and 17th May, 2010. BSE understood the importance of Small and medium enterprises (SME) towards the growth of economy and therefore taken the initiative to launch its SME Platform on 13th March, 2012

How BSE SME segment is helping SMEs to raise funds and how successful is it?

BSE SME platform is doing a lot of awareness programme with various stake holders across the country. Arranging meetings between the promoters and merchant bankers as well as investors. This has brought tangible results and helped 309 companies raising 3237crs.These companies has created a valuation of 18000cr.

How many SMEs are currently registered with BSE SME platform and how many more are in the pipeline?

309 companies have listed on BSE SME platform and 57 companies are in the pipeline.

How much capital have these companies listed on BSE SME platform raised?

3237.47 crores

Please let our readers know the benefits of listing on a stock exchange

1. Provide the SMEs equity financing opportunities to grow their business from expansion to acquisition.

2. Equity financing will lower the debt-burden leading to lower costs and healthier balance-sheets.

3. Expand the investors’ base, which in turn will help in getting secondary equity financing including private placement.

4. Enhance the visibility, through media coverage resulting in a better profile and credibility leading to increase in the value of its shares.

5. Exit option that reduces the lock-in period helps in incentivizing big venture capital participation.

What are the challenges faced by SMEs while accessing capital markets?

SME's face challenges in raising the funds on the ground mentioned below

1.Transparency

2.Corporate governance

3.Compliances

How many companies have migrated to the main board and their market performance?

69 companies

Please tell us about the improvement in the level of corporate governance

After listing all the companies has to declare half yearly (Unaudited) results and audited in the end of the financial year. More transparency comes in as they declare results in prescribed intervals and shareholding to the exchange. Further, they are also required to have one third independent directors in their board and a fulltime company secretary to do all compliances.

Are there awareness programs conducted by BSE SME to encourage SME’s get listed on the exchange.

We have done 1800 seminars and met 28000 promoters. The main concerns were viz

1. Listing will increase the compliances manifold

2. There will be threat of take over

3. Interference in the business by shareholders

4. Accountability will increase manifold