Small businesses with ‘good turnover’ looking to get listed on the stock market will have the Indian government will buying their shares

• Union Minister Nitin Gadkari announced that the government will buy shares in MSMEs that get listed on Indian stock exchanges.
• "The units which have a good turnover and GST will be listed," he said during the Union Cabinet press briefing.
• The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) already reduced the annual listing fees for MSMEs on May 18.

Among the six measures that Nirmala Sitharaman announced in May, one was a ₹50,000 crore equity infusion for MSMEs through Fund of Funds. The Union Cabinet today expanded to say that units, which get themselves listed in the market through this route will have the assurance of the government buying their shares.

"The units which export, have a good turnover and GST, will be listed and the government will buy shares in the company which will be a revolving fund and this will benefit the MSMEs entering the stock market," said Union Minister Nitin Gadkari.


Gadkari explains how the revolving fund will work
The Union Minister highlighted that MSMEs listed on the stock market will no longer have to depend on banks for their funding. The government will be allowed to buy up to 15% of equity in any given MSME stock. “Through this equity investment, the MSME stock will be strengthened,” said Gadkari.


He described that the government will eventually sell off the shares for a profit and use that money to invest in other MSMEs. “Through this method MSMEs with a good balance sheet, good ratings and good GST record — we will give a push to those units,” said Gadkari illustrating how government investments will also help boost exports.

He explained that there are nearly six crore MSMEs in India, which contribute to 48% of the country’s exports and are capable of creating 11 crore jobs. “I am a little optimistic. Since this a revolving fund, it’s possible that it will be worth ₹2 lakh crore within a couple of years,” he quipped.

It’s cheaper to get listed
On May 18, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) announced that they have reduced the annual listing fee for MSMEs by 25%. Normally they are charged ₹25,000 or 0.01% of the full market cap on the BSE and between ₹10,000 to ₹45,000 by the NSE depending on the market cap.

The revised listing fee structure is applicable for existing companies as well as for firms who are waiting to be listed.

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