Importance of SMEs to Pakistan's Economy
Small and Medium Enterprises (SME) segment constitute nearly 90% of all the enterprises in Pakistan. SMEs employ 80% of the non-agricultural labor force and SMEs share in the annual GDP is approximately 40%.
To enable SME financing through capital market, PSX has taken an initiative to create an SME segment where SMEs could raise funds and get listed. A public company with post issue paid up capital of not less than Rs. 25 million and not more than Rs. 200 million can be listed on PSX’s SME segment.
Benefits of Listing on the SME Board
- Listing on PSX will provide SMEs with equity financing opportunities to expand their business and operations.
- Access to equity financing will lower debt burden on SMEs, leading to lower financing costs and healthier balance sheets.
- Enhancement of visibility of SMEs by listing on PSX will in return increase their credibility and profile, thus leading to increase in their share value.
How to get listed on the SME Board?
- SME appoints “Advisor and Consultant”. (Corporate brokerage houses, CA firms, investment banks etc. licensed by SECP could act Advisor and Consultant).
- SME submits listing application to PSX’s Companies Affairs Department (CAD).
- PSX performs due diligence process.
- Once all queries are resolved, PSX submits the listing application to PSX’s listing committee for final approval.
- The SME offers shares through fixed price method or through Book Building method. Initial subscribers subscribe SME shares and SME lists on PSX’s SME Board.