It’s a Tuesday morning. 15 May. While the entire nation has its eyes glued to news channels, waiting for the outcome of the Karnataka elections, there is a listing ceremony going on in the NSE auditorium in Mumbai. On the face of it, there’s nothing exceptional about it.

E2E Networks, a Haryana-based cloud computing startup, gets listed on the NSE Emerge platform, becoming the second venture capital-backed company to do so this month. The first, Pune-based SoftTech Engineers, a software company that caters to the architecture, engineering, and construction (AEC) verticals, was listed on 11 May.

In the midst of commotion caused by Walmart’s acquisition of Flipkart and the state election in Karnataka, the story of these two small-ticket initial public offerings (IPOs) didn’t get much attention. The public listing of E2E and SoftTech, each with an issue size of around Rs 22 crore (~$3.23 million), were infinitesimally small relative to Flipkart’s Rs 100,000 crore (~$16 billion) deal but they are probably just as important to the Indian startup ecosystem.

These listings, the first of their kind, are a harbinger of a new kind of startup exit.

The small and medium enterprises (SME) exchange is a dedicated platform which allows listing of small and medium companies who, otherwise, find it difficult to get listed on India’s main exchanges— the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The stringent rules set by the market regulator Sebi for public listings in India makes it impossible for SMEs to have an IPO. As a solution, Sebi introduced two platforms on BSE and NSE in 2012, called BSE SME and Emerge, respectively. Both of them are tailor-made for the listing of SMEs, with relaxed norms in terms of net-worth and profitability requirements.

SME Exchange Main Board
Track Record Track record of at least three years Three years’ track record of profitability
Positive cash accruals (EBDT), from operations for at least two financial years
Positive net-worth
IPO Grading Not mandatory Mandatory
Post Issue Paid-up Capital Less than Rs 25 crore Not less than Rs 10 crore
Minimum Number of Allottees in IPO 50 1000
Observations on DRHP By the exchange By Sebi
IPO Underwriting 100% underwritten (15% on the books of the merchant banker) Mandatory (Not required where 50% of issue offered for compulsory subscription by QIB)
IPO Application Size Not less than Rs 1 Lakh Rs 10,000 – 15,000
Reporting Requirements Half Yearly Quarterly
Market Making Mandatory Not Mandatory
Eligibility criteria for listing on the SME and main exchanges.


Sidhartha Shukla

In his earlier stint at Moneycontrol, the website owned by the Network18 group, Sid wrote on cryptocurrencies, cybersecurity, business, and finance. Born in Raipur, Chhattisgarh, Sid has spent most of his life in Jalandhar, Punjab. He has a BSc in Mathematics from St Xavier’s College, Mumbai. Sid is a comic book nerd and a big fan of Alan Moore, Neil Gaiman and Brian Azzarello. He can be reached at sidhartha at the rate

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