What is SME Exchange? Should you Invest in Companies?

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 Many companies have to meet the criteria laid down by SEBI to get their shares listed on the stock exchange. These include a three-year operating profit of Rs 15 crore, a minimum post-issue market cap of Rs 25 crore, and so on.


Over some time, even small businesses will be able to raise money from the public through capital markets IPO Investments banks. Such companies are referred to as small and medium enterprises. 


MSME IPO Banks exchange is a separate trading platform within the main stock exchange. It is operated by BSE and NSE. 


How SME exchange is different from a regular exchange


The main difference between the two is the requirements for the listed company and investors' characteristics. 


To facilitate the listing of a diverse range of SMEs, the SEBI has relaxed regulatory requirements such as lower minimum paid-up capital, fewer allottees, and so on. Furthermore, following listing, companies must adhere to fewer compliance requirements.


Should you invest in these companies?

It depends, While investment banks delhi  in these companies can result in outsized returns, it also comes with a higher level of risk. Smaller businesses have untested business models and are more vulnerable to shocks in their operating environments.


Among 236 companies that are listed on BSE MSME IPO and 125 are listed on NSE. The top 50 companies are relatively low volumes. And this is possibly why there are no funds based on the NSE SME Emerge Index, which has provided a CAGR of 11.4 percent over the last four years.

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