SEBI Issues New Guidelines for SME Exchange

SEBI has come up with new guidelines for SME exchange. SEBI has set a post-issue upper limit of Rs 25 cr capital at face value for the companies that wish to get listed on such exchanges. If the company reaches this upper limit it wouldn’t be allowed any follow up issues, any follow-up issue has would only be permissible if new capital doesn’t not exceed Rs 25 cr.

In case companies listed on SME platform exceeds the Rs 25 cr limit, the company will be compulsorily shifted to the main board of the exchange. SEBI has absolved SME companies on SME exchange of requirement of submitting quarterly number, but they can do it on half yearly basis. Such companies are also will have privilege of forgoing the need to publish their results instead they can put their result on website.

German Government to sponsor training program for Indian SMEs

The German ministry of Economic Cooperation will sponsor training program to five MSME associations in the country to help them improve efficiency and their business expertise.

The German ministry has chosen five different associations from different states for this program. The associations from Madhya Pradesh, Punjab, Haryana, Gujarat and Indian Industries Association. The German government through two of organizations- the German Confederation of Skilled Crafts (ZDH), the apex body of the German Skilled Crafts-SEQUA will impart training to the Indian associations. The program is design to improve management expertise, to bring in more professionalism and help companies in improving their access to finance and other services.

The Indian association which are going to part of this program are Federation of Madhya Pradesh chamber of commerce and industry, Indian Industries Association IIA, Mohali Industries Association in Punjab, Gujarat chamber of Commerce and Industry and Faridabad Small Industries Association in Haryana.

MSMEs Big Potential of Pushing IT Spending: NASSCOM Study

Nasscom has come out wiht a study pointing towards huge gap in IT adoption Micro, Small and Medium Enterpises (MSMEs). It has has also pointed the huge untapped potential. According to Nasscom the IT penetration in manufacturing sector is abysmal and SME companies hardly make any major investment in IT.

The IT adoption amongst SME & MSMEs is very high in financial and accounting domain but lag behind in areas of CRM, procurement, production planning and supply chain management. SME companies hardly invest in automation and IT solution for enhancing production efficiency. The study found that though rate of IT adoption was at 75% in finance & accounting amongst companies but it just 18% in manufacturing process and even lower rate of 16% in ERP solutions.

Such low adoption of new technology imperil the chances of gaining competitiveness not just domestically but also in global markets as a lot of these SMEs compete in export markets. According to the study Indian SMEs & MSMEs spent meagre 1% of their total revenue on IT adoption, which was way below the global average of 4.5%. Lack of IT spending is crucial challenge for government which wants to improve both efficiency and competitiveness of Indian manufacturing and make India leader.

The Nasscom study also highlighted both demand side and supply side issues resulting in poor IT adoption amongst SMEs. While lack of internal IT expertise, affordable solutions, complexity of adoption, and lack of service providers was the issue with demand side, the supply side constrains were lack of last mile connectivity, support costs & qualified systems integrators.

A new TV show for SMEs

In line with the increasing importance of SME’s in the Indian economy, the country’s leading business channel CNBC Awaaz in association with Entrepreneur Magazine has launched a new TV show entirely focused on this segment. The show named ‘AWAAZ Entrepreneur’ launched on May 15 will focus completely on SMEs in India.

The business channel aims to reveal the arduous but rewarding journeys of various SMEs and also bring out various ideas, options & solutions available to various sections of our society who yearn to venture out and make it big on their own.

The show will profile SME’s and talk to various stakeholders. The series will also showcase the journeys of eminent industry figures, who have gone through the SME phase and have now transformed into larger businesses. Further, the show will also entertain queries of individuals across the country through an expert.

SEBI Sets Guidelines for Market Makers on SME Exchanges

After allowing exchanges to set up separate trading platform for small and medium size companies, the Securities and Exchange Board of India (Sebi) has issued guidelines for SME (small and medium enterprises) exchanges with respect to market making activity. Sebi has now made market making process mandatory for SME scripts and has laid down terms for members of the exchange who will be willing to engage in market making activity.

The market makers would bring in more liquidity and continuity in buy/sell activity on the exchange. Market makers would be required to provide 2-way quote for 75% of the time in a day. The minimum depth of the quote shall be Rs 1 lakh. However, investors with holdings of value less than Rs 1 lakh shall be allowed to offer their holding to the market maker in that scrip, provided that he sells his entire holding in that scrip in one lot to the selling broker.

The new Sebi guidelines also limit the number of market makers for a particular script; it has been set to five market makers. Sebi has also set several qualifying criteiras for becoming market maker.