Government of Gujarat, to promote the business of Micro, Small and Medium enterprise has formed various subsidies like Interest Subsidy, Capital Subsidy, Technology acquisition subsidy, Market Development Assistance, Assistance for patent registration, SME IPO Subsidy etc. One of the important scheme we will here discuss is SME IPO Subsidy.
What is SME IPO?
Our nations 2 major stock exchange has created new platform for listing of companies which are Small or Medium enterprises to give them opportunity to be listed and raise funds from public through SME IPO. BSE SME & NSE Emerge are the exchange platforms for the SME Companies
Let’s today discuss on eligibility, period and procedure for SME IPO Subsidy.
All About SME IPO Subsidy
Who is eligible?
Any organization which is covered under The MSMED Act, 2006 as Micro, Small or Medium Enterprise and has Udyam Registration Number is eligible to apply under this scheme. It is also to note that for applying SME IPO Subsidy MSME status is to be checked as on date of listing in SME Exchange. The enterprise must be engaged in either Manufacturing Sector or Service Sector. The enterprise which is registered in Gujarat, must have at least one manufacturing Unit / Service Unit in Gujarat.
What is the quantum of subsidy?
Recently latest Industrial Policy, 2020 is announced. Subsidy available is up to 25% (30% for SC/ ST Unit) of total Eligible Expenditure incurred for raising fund through SME Exchange. However, total subsidy amount is subject to maximum limit of Rs. 5 Lacs.
Conditions to avail subsidy
Application for subsidy is to be made within 1 year from the date of listing on SME Exchange.
Unit will observe pollution control measures as prescribed by GPCB or other competent authority (if applicable).
Application should be for raising equity through SME Exchange for the enterprise to be setup in Gujarat, subsidy will be sanctioned & disbursed by IC Office, Gandhinagar.
Procedure for getting subsidy
The application is to be in form AF-08 as per the checklist in form CL-08 with all relevant documents. All documents are to be submitted to Industries Commissioner, Gandhinagar.
On receipt of application will be verified and scrutinized and sanctioned by IC office.
Disbursement of amount of assistance will be done by IC office on availability of the fund, on successful raising of fund through equity & commencement of production of the proposed project.
Below expenditures are considered for the purpose of calculating 25% or 30% of the total expenditure:
- SME Exchange Fees and other Expenses
- Charges by Registrar to the issue
- Charges of lead managers of the issue
- SEBI registered merchant banker charges
- RTA Fees, CDSL and NSDL fees & other expenses.
- Prospectus & IPO form Printing charges
- Advertising & Market Making fees Expenses
- ROC & Ministry of Corporate affairs.
Validity of scheme
As per latest Industrial Policy, 2020 subsidy is valid up to 06th August 2025.
How much time it take?
This is most important question that every applicant ask us. Generally it takes around 4-6 months to complete the process up to disbursement of fund. Recently government has also streamlined the procedure. Through this it is expected that time taken for subsidy process will reduce.
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