SEBI working on alternative route for SME investors
29 Apr 2013
The Securities and Exchange Board of India (SEBI) is working on a new route that will enable investors to put in money in small and medium enterprises (SMEs), a senior official said today.
The market regulator is looking at ways to permit SME exchanges to list without having to make an initial public offer (IPO), SEBI executive director S Ramann said, adding that the issue will, however, be restricted to informed investors.
"We are working on a new platform for small companies...a platform for people or investors who are willing to invest in SMEs will be launched soon," Ramann said while addressing a seminar on the 'Potency of capital markets for SMEs' organised by the Bombay Stock Exchange (BSE).
He said the move was in line with finance minister's proposal in this year's budget to allow listing of SMEs on bourses without having to go through an initial public offer.
He, however, did not give a timeline for the new facility.
He said this would be in addition to the existing SME platforms, which BSE and NSE offer. Under the existing platforms, small companies can go public without filing with the SEBI.
Ramann also said the proposed platform could be part of SME exchanges in which informed investors can put their money into these entities.
He, however, said SEBI won't compromise on investor interest as there were chances of SMEs facing winding up. At the same time, he said, the SME sector is the largest employment generating sectors employing around 80 million people.
