Start-up listing – Opportunity to Organic Growth

Bombay Stock Exchange Limited (herein referred to as “BSE”) has set up the BSE Start-up Platform as per rules and regulations laid down by the Securities and Exchange Board of India (herein referred to as “SEBI”). BSE Start-up Platform offers an entrepreneur, an Investor friendly environment, which enables the listing of Small and Medium Enterprises (herein referred to as “SMEs”) from the unorganized sector scattered throughout India into a regulated and organized sector. As on date, the market statistics are as under:

Number of companies Listed on BSE Start-ups till Date	4
Market capital of companies Listed on BSE Start-ups till Date (INR in Crores.)	65.38
Total Amount of Money Raised till Date (INR in Crores.)	19.00

Source: www.startupsbse.com

Sectoral Analysis:

Salient Features of ‘BSE Start-up Platform’ listing:

Applicability:

Financial Criteria:

• The net worth should be positive.
• Preferably, there should be investment by QIB Investors [as defined under SEBI ICDR Regulations, 2009]/Angel Investors/Accredited Investors for a minimum period of 2 years at the time of filing of a draft prospectus with BSE.
• In case company is not registered as a start-up with MSME / DIPP, the company’s paid-up capital should be minimum INR 1 crore.
• The post-issue paid-up capital of the company [face value] shall not be more than INR 25 crores.

Other Requirements:

• It is mandatory for a company to have a website.
• It is mandatory for the company to facilitate trading in Demat securities and enter into an agreement with both the depositories.
• There should not be any change in the promoters of the company in preceding one year from the date of filing the application with BSE for listing under the Start-up segment.

Disclosures:

A certificate from the Applicant company I Promoting companies stating the following:

• The company has not been referred to National company Law Tribunal [NCLT] under Insolvency and Bankruptcy Code,
• There is no winding-up petition against the company that has been accepted by the National company Law Tribunal [NCLT].
• None of the Promoters / Directors of the company has been debarred by any regulatory agency/ies.

Compliance on BSE Start-up Platform:

Preparation for IPO:

IPO is one of the means of financing and an important method to raise funds for any corporate aspiring for sustained growth. It is thus important that every company is aware of the requirements and the kind of preparation required before entering the capital market.

An overview of the process of IPO and activities are listed below:

Migration from BSE Start-up Platform to the Mainboard:

• companies seeking migration to Main Board of BSE should satisfy the eligibility criteria.
• It is mandatory for the company to be listed and traded on the BSE Start-ups Platform for a  minimum period of two years and then they can migrate to the Main Board as per the guidelines specified by SEBI vide their circular dated l5th May 2010 and as per the procedures laid down in the ICDR guidelines Chapter X.

Key Comparison between BSE Start-up IPO listing and BSE SME IPO listing:

Particulars	BSE Startup IPO listing	BSE SME IPO listing
Applicability	The company incorporated under companies Act,2013	The company incorporated under companies Act,1956 or existing Partnership/LLP converted to company under companies Act, 2013
Pre-IPO paid-up capital threshold	INR 1 Crore	INR 3 Crores
Track record	At least 2 years	At least 3 years
Funding criteria for applicability	Investment by QIB Investors | Angel Investors |Accredited   Investors for a minimum period of 2 years at the time of filing of a draft prospectus with BSE	Funded by way of loan/equity by Banks or Financial Institutions or Central or State Government or its undertaking, or Its Group company should have been listed for at least two years either on the Main Board or SME Board of the Nationwide Exchange.
Cap on Cash Accruals (Earnings before Interest and Depreciation)	No limit	Positive
Disclosure condition as regards Promoters/Directors for bringing transparency and Integrity amongst management	None of the Promoters /Directors of the company has been debarred by any regulatory agency/ies	No specific Condition
Specific condition for Migration to Mainboard	the minimum period of two years on BSE Start-up Platform	paid-up capital of more than 10 Crores + Market Capitalisation should be minimum INR 25 Crores

Other Income tax concessions to Start-ups:

How can Incorp India help you?

At InCorp India, we are committed to delivering quality in assurance, tax, and advisory services. We have curated an MSME suite to provide various benefits for MSMEs. Our combined dedicated team of Corporate Advisory, Valuation, Investment Banking, and Taxation experts can help you plan and prepare for IPO, conceptualizing the process, pre and post-issue compliance, and provide the ease for filing the required compliances. We can assist you not only in terms of compliance but also to evaluate the eligibility of listing, valuation principle specific to business by evaluating cost-benefit analysis. If you are interested in knowing the benefits available to MSMEs and Startups and related assistance, you can write to us on ‘info@incorpadvisory.in’.