Updated on 20 July 2012
Contrary to the main exchanges, the SME platforms have different requirements for the merchant bankers. Ms Tanika Singh, associate at Amarchand and Mangaldas and Suresh A Shroff and Company, a legal firm, further explains, "A nominated investor (NI) is a qualified institutional investor or private equity fund, who subscribes to the issue in case of under-subscription or assists in the market making process. The role of NIs is especially relevant as other investors could potentially place reliance on NI's participation in making their investment decision. The other is that of market-making which has been made mandatory for a minimum period of three years. The NI concept has been introduced to reinforce the role of the merchant bankers, especially in the context of compulsory market-making."
The relative inexperience of most companies entering into such a platform would require a degree of handholding for sometime. Ms Singh adds, "Keeping in mind the success of the AIM framework and that the Indian SME, exchanges are currently in their pilot stage, the SME Listing Framework might significantly benefit from the introduction of a similar roster of advisers registered with the exchanges, who can assist with unknown compliance requirements and standards."
Apart from that this, some other changes have also been incorporated in order to further aid the companies, such as the submission of financial results on a half yearly basis instead of quarterly, the choice of making available the results on the website instead of publishing them and sending in only the salient features to the shareholder.
A point strongly favored by investors are the exit options available after the listing in an exchange. Mr Kumar, who said that Camson Biotech would also be interested in moving to an SME platform in future, further reiterated, "People who put in money as an investment should have an exit route. Getting listed gives us that liberty."