Sme Platform the Way Forward

It is established that Small and Medium Enterprises play a vital role for the growth of the Indian economy.

- Adv Sherry Samuel Oommen

Introduction

The sector contributes 45% of the country’s industrial output, 40% of the nation’s exports, 42 million in employment. In addition, the sector creates one million jobs every year and produces more than 8000 quality products for the Indian and international markets. As a result, Small and Medium Enterprises (“SMEs”) are today exposed to greater opportunities for expansion and diversification across the sectors.

To promote, develop and enhance the vision and objectives of SMEs, the Indian Government has introduced various fiscal and regulatory policies for enhancing competitiveness of Indian SMEs in the global market. One of the key initiatives in this regard has been the introduction of Institutional Trading Platform (“ITP”) through SME platform.

The SME platform is a Securities and Exchange Board of India (“SEBI) approved platform for SMEs to list their specified securities on the ITP of a recognised stock exchange without an Initial Public Offering. The main objective of this move is to widen the scope of fund raising methods meanwhile reducing the paperwork, increasing tax benefits and to provide easier exit options for informed investors like angel investors, VCFs, etc.

Legal Framework of the ITP