Assistance to SME through SME Exchange

The Government of Gujarat in partnership with Industries and Mines Department had offered various schemes and subsidies for the development of manufacturing enterprises. As a part of industrial promotions, the scheme for Small and Medium Enterprises (SME) was introduced to provide financial assistance to SME for raising capital through SME Exchange. This article explains about the scheme for assistance to SME in detail. To know about SME Stock Exchange in India click here.

Eligibility Criteria

The eligibility criteria to obtain financial assistance under the scheme are explained in detail below:

Any enterprise having Entrepreneurs Memorandum (EM Part-II) or Udyog Aadhar under the MSME Development Act, as manufacturing enterprise is eligible for this scheme.

Expenditure covered under the Scheme

The following are the expenditure would be eligible for assistance under the scheme:

Stock exchange filing fees
Registrar to the issue expenses
Stock exchange software expenses
RTA fees, CSDL and NSDL joining and admission fees
Printing charges of the prospectus
Printing charges of form
Advertising charges
NSE or BSE fees and other expenses
Marking making fees

Quantum of Assistance

The quantum of assistance provided under this scheme are specified here: For investment up to INR 2 Crore in plant and machinery The assistance will be around 35% of the incurred expenses on raising of the fund through SME will be given. And, the maximum amount of up to 5.00 Lakhs on raising of equity by SME during the operative period of the scheme. For investment from INR 2 Crore up to INR 10 Crore in plant and machinery The assistance will be around 20% of the incurred expenses on raising of the fund through SME will be given. And, the maximum amount of up to 5.00 Lakhs on raising of equity by SME during the operative period of the scheme.

Time Limit to apply for the Scheme

The eligible applicant has to submit the application form within one year from the date of successfully listing on the SME platform. In case, if the applicant applies after one year of listing on the SME platform, then the application will be rejected.

Policy Period

The assistance for the SME will be applicable for 2-3 years. The scheme commences from 01/04/2017 and ceases by 1/12/2019.

Documents Required

The required documents are to be submitted along with the application form.

Constitution of Enterprise (Memorandum & Article of Association)
MSME Acknowledgment No. & date/UA No & Dt
Certified copy of permission/Registration with SEBI
Copy of SME Exchange Registration/Permission
Other Registrations/Licenses/Approval/Permission
Copy of application form prepared by enterprise & approved by SEBI for Equity Capital issue
Project Report (DPR)
Copy of public Issue Broucher
CA Certificate for Equity Capital raised through SME Exchange
Proof for start of commercial production (First Sale Bill)
Cancelled Cheque of the bank of enterprise

Application Procedure for the Scheme

The applicant has to propose MSME Commissionerate in prescribed application form within one year after a successful listing on the SME platform along with documents as per the checklist.
The expenditure statement should be as per the specified norms and should be C.A. Certified.
The payment made by Cheque, RTGS or NEFT will be considered eligible. The payment for expenditure like stamp fees and government fees Rs.20,000/- will be considered eligible for the assistance. And the amount of above Rs.20,000/- will not qualify for assistance.

Note: The application form for the financial assistance to the SME is reproduced below for quick reference. [pdf-embedder url="https://www.indiafilings.com/learn/wp-content/uploads/2019/08/Application-Form-SC-ST-08062018.pdf"]

Verification Process

The application form along with the documents as per checklist stamped and signed by authorized person will be received by MSME Commissionerate. The application for raising equity through SME Exchange for the enterprise set up in Gujarat will be verified. Also, it will be verified that the application received within one year from the successful listing on the SME platform. The category of the unit would be verified from valid EM-II/Udyog Aadhar of the enterprise and also the audited balance sheet of concern financial year. The details of the expenditure will be verified with Bank account statement of the applicant. After verification, H.O. or concern, DIC will make the inspection and check the expenditure statement.

Disbursement of Fund

The application, along with the documents, will be taken up an agenda to be presented before the State Level Implementation Committee. And then the sanction letter will be issued to the applicant unit. After issuing sanction letter, the MSME Commissionerate or DIC will make physical verification of the documents and expenditure statement within 15 working days from the date of application. Disbursement of the approved assistance is made through RTGS/NEFT/e-payment by MSME Commissionerate as per availability of the grant.

Other Conditions

The application should be for raising equity through SME exchange for the enterprise should be set up in the state of Gujarat.
The proposal under this scheme will be approved and sanctioned by MSME Commissionerate, Gandhinagar.
The enterprise should have to follow the guidelines of SEBI for raising capital through the SME Exchange.
The enterprise who have successfully raised capital through SME Exchange during the operative period of the scheme can apply within the date of 01/04/2017 to 31/12/2019.
The applicant will have to apply in prescribed format along with the documents as per the checklist.
The expenditure should be obtained during the operative period of the scheme from the date 01/04/2017 to 31/12/2019 will be eligible for assistance.
The enterprise engaged in service, and trading activities will not be eligible under the scheme.
The decision of the SLIC Committee will be the final for sanctioning the assistance on the above expenditure.

Contact Details

To know more about the assistance for SME, contact the following address: Designation: Deputy Commissioner of Industries (MSME Incentive) Address: No. 1, 4th Floor, Udyog Bhavan, Sector 11, Gandhinagar-382 017 Mobile no : + 91 79 23252594, 23252588, 23252659 Email id: dci-msme-inc@gujarat.gov.in io-msme-inc@gujarat.gov.in msmeinc@gujarat.gov.in