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SMEs can migrate to main board of exchange on fulfilling some of the conditions. SMEs have seen its stocks perform way better and offering returns to investors after migrating to the main board of SME platform. In this article, we shall discuss the relevant provisions of SEBI (LODR) Regulations 2015, SEBI (ICDR) Regulations, 2018, and of Companies Act 2013 with respect to the migration from SME platform to the main board of an issuer.
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You would be aware of the fact that a company who is unable to fulfil the conditions prescribed under Chapter II of SEBI (ICDR) Regulations 2018 to get its equity shares listed on the main board can get its shares listed on the SME platform by complying to the provisions provided under Chap. IX of the SEBI (ICDR) Regulations, 2018.
Moreover, in case the company wants to get its equity shares listed on the main board, it can do so according to the regulation of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Company that has post issue face value of equity shares of more than 10 crore and up to 25 crore can voluntarily migrate to the main board provided that approval has been obtained of the shareholders by passing a special resolution through postal ballot.
It may be noted that special resolution will be considered valid only if the total votes cast by non-promoters in favour of the resolution amounts to two times the votes cast against the resolution.
The stock exchanges have issued the migration policy and have specified certain Criteria for migration from SME to the main board. Any company on the SME platform having paid up capital of more than 10 crore can apply to migrate to the main board provided:
The procedure for migration is as follows:
The due process must be followed in order to ensure smooth migration from SME to the main board. After migration from the SME platform to the main board, retail participation in the companies has increased, which has helped the performance of SME companies’ stocks.
Read our article:All about SEBI (ICDR) (Amendment), Regulations, 2021
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
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