BSE Limited sets Rs 100 crore SME Main Board migration test

BSE requires an SME company seeking Main Board migration to maintain average market capitalisation of Rs 100 crore over six months and to have been listed for at least three years. The revised policy, applicable from August 11, 2025, also sets liquidity, profitability, financial and compliance conditions, making an upgrade conditional rather than automatic.

What do BSE’s revised SME-to-Main Board rules require?

BSE amended its SME migration criteria through Notice No. 20250820-11 dated August 20, 2025, following an August 11, 2025 media release and Exchange Notice No. 20231124-55 of November 24, 2023. The revised policy applies from August 11, 2025 and provides unified eligibility criteria for an SME-platform company seeking Main Board migration.

BSE requires a six-month average market capitalisation of at least Rs 100 crore for migration. It calculates the measure by aggregating daily market capitalisation on days when a security traded and dividing that total by all trading days in the six-month period. The calculation therefore includes trading days without a transaction in the denominator, rather than relying only on days when the security traded.

The Rs 100 crore migration threshold differs from the Rs 1,000 crore threshold stated for direct Main Board listing. Both routes use a six-month average market-capitalisation measure, but the direct-listing figure is 10 times the migration figure for an issuer already listed on the SME platform.

Which financial and trading conditions must an SME company meet?

BSE requires paid-up capital of at least Rs 10 crore, average operating profit of Rs 15 crore across the preceding three years, and operating profit of at least Rs 10 crore in each of those three years. The policy labels operating profit as EBIDTA and requires the figures to be calculated on a restated consolidated basis. The three periods must each be full 12-month years.

The financial conditions also require net worth of Rs 1 crore in each of the preceding three full years and net tangible assets of at least Rs 3 crore in each of those years. No more than 50% of net tangible assets may be held in monetary assets unless the company has used, or made firm commitments to use, the excess in its business or project. A company that changed its name within the preceding year must also have earned at least 50% of preceding full-year revenue from the activity indicated by its new name.

BSE’s six-month liquidity tests require at least 5% of the weighted average number of listed equity shares to have traded, trading on at least 80% of days, and average daily turnover of at least Rs 10 lakh. The policy also requires minimum daily turnover of Rs 5 lakh, average daily trades of 50, and at least 25 trades on each day. For average turnover and average trade counts, BSE divides aggregate figures on days traded by total trading days in the six-month period.

When can an SME company apply or be required to migrate?

An SME company with paid-up capital above Rs 10 crore but below Rs 25 crore may apply for Main Board migration after approval through a postal-ballot special resolution. Votes cast in favour by shareholders other than promoters must be at least twice the votes cast against by those shareholders. That two-to-one test applies to the non-promoter vote, not to all votes cast.

Regulation 280(2) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, or SEBI ICDR Regulations, addresses a further capital issue that would take post-issue paid-up capital beyond Rs 25 crore. Where a rights issue, preferential issue, bonus issue or other further issue would cross that level, the company must migrate and seek Main Board listing for the proposed equity shares, subject to Main Board eligibility criteria.

Before such a further issue, the company must obtain Main Board in-principle approval and secure the specified special-resolution approval. The prospectus also describes an alternative: a company may make a further issue without migration where capital would exceed Rs 25 crore if it undertakes to comply with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, or LODR Regulations, applicable to Main Board-listed companies.

What listing, governance and compliance filters apply?

BSE requires a company to have been listed for at least three years and to have a three-year LODR compliance record with no pending non-compliance when it applies. The applicant must have at least 1,000 public shareholders in its latest shareholding pattern. Promoters must hold at least 20% at application, although promoter-group holdings may address any shortfall; that requirement does not apply to IPO-listed companies without identifiable promoters.

The policy also requires no continuing Securities and Exchange Board of India debarment order against the company, its promoters, promoter group or directors, or against another company in which they hold the specified roles. It excludes a company or promoters or directors classified as wilful defaulters, fraudulent borrowers or fugitive economic offenders, and companies admitted by the National Company Law Tribunal for winding up or corporate insolvency resolution process. The company must also have 100% of holdings in dematerialised form and must not have been suspended for LODR non-compliance during the preceding 12 months, except for procedural reasons.

Additional filters include no pending defaults on bonds, debt instruments or fixed deposits by the company and specified related entities, plus a credit-rating-agency certificate on use of IPO proceeds and subsequent issues after SME listing. The applicant must have no pending investor complaint on SCORES and cannot be under Enhanced Surveillance Measure, Additional Surveillance Measure, Graded Surveillance Measure or trade-to-trade surveillance action when applying. BSE specifies a two-month cooling-off period after a security exits trade-to-trade status or graded surveillance action.

BSE further requires the same line of business for at least three years, with at least 50% of revenue from operations arising from that continuing activity. The applicant cannot have an audit qualification concerning going concern or material financial implications that remains in effect on the application date. These tests sit alongside the Rs 100 crore market-capitalisation and six-month liquidity requirements.

Conclusion

BSE’s August 2025 framework combines sustained market value, trading activity, three-year financial measures and compliance history in one migration assessment. An SME company must satisfy the Rs 100 crore six-month average market-capitalisation test, Rs 15 crore three-year average operating-profit test, listing record, public-shareholder requirement and regulatory filters rather than relying on paid-up capital alone.

The next step for a prospective applicant is a formal application and the information memorandum prescribed under the SEBI ICDR Regulations. BSE states that meeting eligibility criteria and submitting an application does not grant approval, and it may close or reject an application if documents or clarifications are unsatisfactory, incomplete, incorrect, misleading or false, or if exchange rules are contravened.