All of you know about the two Indian Stock Exchanges – NSE & BSE. National Stock Exchange & Bombay Stock Exchange. Both of these stock exchanges are well-known stock exchanges having a great daily trading volume.

But you may not now that, there are 2 other stock exchanges also in India which are not that much famous -

01) OTCEI – Over the Counter Exchange of India &

02) IndoNext

Both of these stock exchanges are for Small and Medium sized Enterprises (SMEs). If you own a micro or small business which is not eligible for Venture Funding, Angel Investor funding or Private Equity Funding than you can raise fund via these 2 smaller stock exchanges.

But unfortunately, both of these stock exchanges for SMEs are not that much successful. In fact, many Indians don’t even know that such types of stock exchanges are exist.

But this time, Government of India is planning to launch such a Stock Exchange Platform for SMEs. But this time, the government want to make it successful.

Here are few facts & key information about Dedicated Stock Exchange for SMEs -

- These type of stock exchanges are not for average investors. They are for highly informed investors only who have high loss bearing capacity such as High Net worth Individuals (HNIs) & Institutional Buyers.

- The Minimum amount of trading in such type of dedicated stock exchange for SMEs will be Rs.1 Lakh.

- It has also been proposed that the player(s) setting up the SME stock exchange should have a net worth of at least Rs. 100 Crore.

- Such type of stock exchange will be very much helpful to PE players & VCs because they can exit through this exchange.

- This Exchange is for Small Businesses fund raising because getting private equity funding and going to IPO isn’t a suitable route for every business.

- Our past experience showed that such types of platforms have not been so much of success.

- One important issue is that, what kind of Investors should be permitted to trade in SME stocks. according to the guidelines it will be better if we only allow Qualified Institutional buyers & HNIs.

- Also a small business can’t afford to publish their financial results on quarterly basis so this stock exchange will allow to publish financial results every year.

- The other main concern is that, the liquidity of these stocks also should be maintained. if the exchange will be illiquid, the SMEs will be forced to go to VCs or PEs.

- The regulator must also put some threshold at which a company could migrate to bigger exchanges like the BSE and NSE.