Updated on 20 July 2012
Apart from the access to public equity which a boon during the growth phase of any company, a popular opinion is that getting listed on a stock exchange offers a sense of visibility along with enhancing the transparency in a company's operations. This would not only attract investors but also build a trust quotient with other external government agencies and other private funds, an added advantage to the biotech companies.
The fine print
The most essential criteria for selection of the companies for both Emerge and BSESME is based on the underlying principle that the post issue paid up capital is to be less than Rs. 25 crore. This differentiates it from the general definition of the MSME industry which states that an SME is one where the investment in equipment or production plant does not exceed Rs 10 crores. This allows for the participation of a large number of companies from all sectors making the option available to many entrepreneurs. Mr Tyagi seconds this. "The number of people who are already listed in NSE and are eligible for getting listed on Emerge is quite high and the current regulations in place allow for the transfer of these firms between the exchanges," he says.
Mr Tyagi also added that a lot of companies in the healthcare and pharma industry have already expressed interest in Emerge.
Another salient feature is that the company should be cash positive for two years as opposed to three years on the main board. However, owing to the long research timelines of most biotech companies, a lot of them find it difficult to show such results proving it to be a major impediment. However, Mr Tyagi says, "Exceptions can be made in a few cases if the company can show good credibility and have a good ecosystem and that can validate its work."