SMEs Shift Towards Mainboard Exchanges Of the total 442 SMEs listed on the BSE SME index so far, more than one-third (176) of them have migrated to the BSE mainboard already. Same holds true for NSE platform, wherein it has seen migration of over 130 SMEs out of a total of 333 (as of July 6, 2023).

By Priya Kapoor

This story appears in the July 2023 issue of Entrepreneur India. Subscribe »

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Picture Courtesy: Bombay Stock Exchange

Till a decade back, the vast SME sector of our country had limited options to raise funds for their businesses. It had no access to the capital market route. However, things changed in 2012, when the BSE and NSE introduced SME exchanges on their platforms. It saw SMEs, the backbone of the Indian economy, getting a major boost in terms of viable and sustainable options to raise funds from the capital markets.

Since their introduction, both platforms have seen a number of SMEs getting listed and this number keeps increasing year over year. During 2021-22, the BSE SME platform witnessed the listing of 33 companies, which nearly doubled to 63 in fiscal 2022-23. In case of NSE, 62 companies got listed in 2022-23 compared to 31 in 2021-22. The need for a separate exchange for SMEs has been felt worldwide. At present, over 20 economies operate separate SME exchanges, including China, London and Korea.

"SME and start-up companies in the formative years find it challenging to raise resources for their passionate projects. Even when they can raise from banking and other debt channels there is inherent commitment on interest outflow without being certain on outcomes of the project. In that sense BSE SME segment provides a good opportunity to raise risk free capital which allows more scope for growth of business," says Sameer Patil, chief business officer, BSE Exchange.

Moving to the mainboard- a step further

Of the total 442 SMEs listed on the BSE SME index so far, more than one-third (176) companies have migrated to the BSE main board already. Same holds true for NSE platform, wherein it has seen migration of over 130 companies out of a total of 333 (As of July 6, 2023).

"The migration is aligned with our expansion and future plans of the company which are in line with the SEBI guidelines for main board listing," says Shalin Sheth, Founder and Managing Director of Advait Infratech Limited, a leading company in product solutions for Indian power and telecom infrastructure projects, which recently announced its migration mainboard from BSE SME. The company got listed on the BSE in 2020, almost eleven years after its inception.

Nandini Creations, famous for Jaipur Kurti brand, is another SME that migrated to mainboard exchange five years after it got listed on the National Stock Exchange (NSE) Emerge, a platform under NSE for startups and mid-sized companies.

On December 30, 2021, HEC Infra Projects Ltd became the 100th company to migrate from the NSE SME platform to the main-board. The company is an EPC (Engineering, Procurement, and Construction) and SIRC (Supply Installation Testing & Commission) contractor in the field of electrical engineering.

Ahmedabad-based Zodiac Energy, which has been in the solar energy space, is the first company to migrate simultaneously on BSE & NSE main boards from NSE Emerge. Founded by Kunj Shah, the company migrated to mainboard in 2021, after getting itself listed in 2017.

Benefits of migration

Besides encouraging retail investors participation, the move of migration also enhances the company's visibility and image as a mainboard company. It also increases stock performance and market capitalization. "As mainboard companies are benchmarked at higher level governance, transparency and compliance standards, business prospects as well as visibility improves significantly," adds Patil.

For Nandini Creations, the migration provided a boost to the growth of the company. "It helped the company to attract more investors and has brought more liquidity, visibility, credibility and prestige, besides value creation and recognition of our company in the market. The accounting is also improved as we have to file and publish financial results on quarterly basis to NSE. Since all compliances and reporting is need to be done on time, the faith of investors in our company has also been increased from financial front," says Anuj Mundhra, Founder, Nandini Creations.

The Migration process: From BSE SME to Mainboard

So what does the process of migration entails? A company listed on the BSE SME platform wishing to apply for migration to the Main Board platform has to comply with many criterias. Firstly, to go about it the company's securities must be listed and traded on the BSE SME platform for at least 2 years. Secondly, it must have a paid-up capital of more than INR 10 crores post-issue and market capitalization of the company should be INR 25 crores. Also, at least two-thirds (2/3) of the shareholders must pass a special resolution for migration in the Annual General Meeting (AGM). And lastly, the promoters and/or directors of the migrating SME must not have been debarred or prohibited by SEBI. Says Sheth, "As we already fulfilled all the requirements for a listed SME to be migrated to the Mainboard Exchange, the decision was a natural step forward."

From NSE SME to the Main Board

The process of moving from NSE SME to mainboard is different from the process followed on BSE. On 21st April 2023, NSE came out with a new framework. According to which, while the paid-up equity capital and market capitalization requirements are the same as for BSE migration; companies need to complete at least three years since the listing of its shares on the NSE SME platform. Also, it is required to have a positive profit after tax and positive cash accruals (earnings before interest, depreciation, and tax) in each of the three preceding financial years, with a net worth of at least INR 50 crore after deducting accumulated losses.

Companies are also required to meet criteria of having at least 1,000 public shareholders on the last day of the preceding quarter from the date of migration application. Further, there shouldn't be any no liquidation petition or disciplinary action or regulatory violation in the last 3 years. Also, there shouldn't exist any winding up petition filed against the company.


The process of migrating to the mainboard is accompanied with documentation. Companies seeking to move to the mainboard need to submit documents like certified copy of resolutions passed by the board of directors and shareholders regarding the migration, a printed copy of the AGM/EGM notice was sent to shareholders to seek their approval on the migration, Scrutinizer report to provide the results of voting by public shareholders, Certificate from the company secretary or managing director in the specified format, Hard copy and soft copy of the information memorandum duly signed by the company secretary or managing director.

On NSE platforms, companies need to provide migration confirmation from the SME company to be filled in the format prescribed by the exchange along with company details (SCORES authentication ID, Investor grievance redressal mechanism, change in company control since listing, etc.), auditor's certificate on the net worth of the company and auditor's certificate on the details of the use of funds raised from the public.


Moving to the mainboard also means challenges related to stricter compliance and regulation, but SMEs have taken it in their stride. "I believe, the condition of being on the platform for two years prior to migrating to the mainboard, provides the companies necessary time frame to get accustomed to regulatory compliances, and test the understanding of their companies growth, financial discipline, adherence to corporate governance norms, etc. It is natural to have typical concerns prior to listing such as fear of loss of ownership, oversight by regulators, increased compliances, etc., however, the benefits of higher visibility and credibility outweighs these challenges," says Seth.

"When you have vision to achieve something big and wants to establish the same you have to face the challenges as well. The compliances are the strength of our company. We always believes that we should follow all the rules, laws and regulations since inception as they are created keeping in mind the benefits for all be it company, government most importantly stakeholders etc," says Mundhra.

However, companies want the time period required for migration on NSE to be reduced from 3 years at present. "The compliances and procedures are made keeping in mind the interest of companies, stakeholders, shareholders and public at large. If the company fulfills other criterias, then this time period should be reduced," adds Mundhra.

Priya Kapoor

Feature Editor

Priya holds more than a decade of experience in journalism. She has worked on various beats and was chosen as a Road Safety Fellow in 2018, wherein she produced many in-depth & insightful features on road crashes in India. She writes on startups, personal finance and Web3. Outside of work, she likes gardening, driving and reading. She can be reached at her email id:




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