The Bombay Stock Exchange (BSE) and the PHD Chamber of Commerce and Industry (PHDCCI) signed a Memorandum of Understanding (MoU) on 17 August 2026 in New Delhi to help Micro, Small and Medium Enterprises (MSMEs) raise funds through the stock market. The pact aims to build awareness about equity financing, especially through the BSE SME Platform, and guide eligible firms through the listing process. It brings a stock exchange with national reach together with an industry chamber that represents businesses at the grassroots level.
What Does the BSE-PHDCCI MoU Aim to Achieve?
The MoU was signed at the PHDCCI office in New Delhi by Sundararaman Ramamurthy, Managing Director and Chief Executive Officer of BSE Limited, and Dr. Ranjeet Mehta, Chief Executive Officer and Secretary General of PHDCCI. Senior officials from both sides were present, including Gaurav Kapoor and Varun Gupta from BSE and Dr. H. P. Kumar, former Chairman of the National Small Industries Corporation (NSIC) and Advisor to PHDCCI.
Under the agreement, BSE will provide subject matter experts and trainers for a series of joint activities. These include awareness programmes, seminars, workshops, roadshows and knowledge sessions held at state and district levels to explain how MSMEs can raise capital from the market. The focus is on equity financing, which means raising money by selling shares to investors through an Initial Public Offering (IPO), rather than only depending on bank loans.
The collaboration will also offer mentorship, expert guidance and capacity building support. A nodal point mechanism will be created to help businesses explore suitable capital market options and understand listing requirements. PHDCCI will use its network of member associations, regional chambers and industry bodies to reach MSMEs in different parts of the country and mobilise participation. BSE leadership said the BSE SME Platform gives eligible businesses a chance to access growth capital while improving their visibility and corporate credibility.
Understanding the Partners: BSE and PHDCCI
Bombay Stock Exchange: Asia’s Oldest Bourse
BSE Limited, earlier known as the Bombay Stock Exchange, is located on Dalal Street in Mumbai, Maharashtra. It was established in 1875 as the Native Share and Stock Brokers’ Association under Premchand Roychand, a well known businessman of that time. It is the oldest stock exchange in Asia and the tenth oldest in the world. It was the first exchange in India to get permanent recognition under the Securities Contracts (Regulation) Act, 1956.
BSE is now one of India’s two main stock exchanges, along with the National Stock Exchange (NSE), which was established in 1992. BSE lists more than 5,000 companies, one of the highest counts for any exchange globally. It is regulated by the Securities and Exchange Board of India (SEBI), which was first set up in 1988 as a non-statutory body and became a statutory body under the SEBI Act, 1992. SEBI is headquartered in Mumbai and is headed by Chairperson Tuhin Kanta Pandey. BSE was corporatised and demutualised on 19 May 2007 under the BSE (Corporatisation and Demutualisation) Scheme, 2005, and was listed on NSE on 3 February 2017 under the ticker BSE. The exchange is led by Sundararaman Ramamurthy as MD and CEO and S. S. Mundra as Chairman. Its benchmark index is the BSE SENSEX, which has been tracked for over four decades.
PHD Chamber of Commerce and Industry: A Century-Old Apex Body
PHDCCI stands for PHD Chamber of Commerce and Industry. The letters P, H, D stand for Progress, Harmony and Development, and also reflect its original base in Punjab, Haryana and Delhi. It is a multi-state apex chamber established in 1905 and headquartered at PHD House, Siri Institutional Area, New Delhi. The chamber is more than 120 years old and works with the motto “In Community’s Life and Part of It”.
PHDCCI acts as a link between government, industry and society. It carries out research based policy advocacy, provides advisory services on taxation, finance, capital markets, infrastructure, labour and trade, and issues certificates of origin to exporters as authorised by the Government of India. It is represented on more than 130 central and state advisory and consultative bodies and has signed over 100 MoUs with national and international industry associations. It operates through expert committees, regional offices and state chapters, with major conferencing facilities at PHD House in New Delhi and Chandigarh. The chamber also runs social initiatives through the PHD Rural Development Foundation (PHDRDF) in areas like education, health and rural development. Its present leadership includes Dr. Ranjeet Mehta as CEO and Secretary General.
The BSE SME Platform: Gateway for Small Businesses to Capital Markets
How the SME Platform Works
Many small firms find it hard to get long term funds from banks. To solve this, SEBI allowed stock exchanges to set up separate SME platforms in 2012 under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. BSE SME was launched on 13 March 2012 after SEBI approval on 27 September 2011, with BCB Finance Ltd becoming the first company listed on the platform. NSE’s platform, called NSE Emerge, was launched around the same time.
The BSE SME Platform is a dedicated segment of BSE for Small and Medium Enterprises to raise equity capital by listing their shares. It has lighter listing and compliance requirements compared to the main board, which makes it cheaper and simpler for smaller firms. Key features include a mandatory market making mechanism, where a SEBI registered market maker gives two way quotes for the first three years to ensure liquidity, and a minimum trading lot of ₹1 lakh. Companies must have post-issue paid up capital not more than ₹25 crore to list on the SME platform, and they can later migrate to the BSE main board after at least two years if they meet main board criteria. Listing requires filing a Draft Red Herring Prospectus (DRHP) through a merchant banker, who carries out due diligence.
Performance and Scale So Far
The platform has grown into a significant route for small firms to tap public capital.
| Indicator | Figure |
|---|---|
| Companies listed on BSE SME till date (August 2026) | 763 |
| Total amount of money raised till date | ₹17,471 crore |
| Market capitalisation of companies listed till date | ₹2,36,003 crore |
| Companies currently listed (as on date) | 560 |
| Companies migrated to BSE main board | 203 |
| Combined with NSE Emerge, total companies listed | more than 1,200 |
| Combined amount raised through SME IPOs | nearly ₹27,000 crore |
As of July 2025 data cited for context, the market capitalisation of companies on the BSE SME platform had crossed ₹1.8 trillion, and the platform had seen more than 586 listings at that time. The BSE SME IPO Index tracks the performance of these listed SMEs. According to BSE leadership, around 760 companies from 27 states have raised about ₹17,000 crore, with a combined market value of about ₹2 lakh crore.
Why Equity Financing Matters for MSMEs
Equity financing means raising money by selling a share of ownership in the company to investors. This is different from debt financing, where money is borrowed from banks and must be repaid with interest. For MSMEs, equity has several advantages.
First, it provides risk capital without the burden of regular interest payments or collateral, which many small firms lack. Second, listing creates visibility and credibility, improves corporate governance and financial transparency, and helps unlock the value of a family owned business while promoters can still retain control. Third, it opens a future financing route, as listed firms find it easier to raise additional capital later.
Yet MSMEs face hurdles. Many hesitate to list because they worry about lack of knowledge on corporate governance and compliance, difficulty in finding a reliable merchant banker who will guide them fairly, and concerns over confidentiality in family run firms that prefer to keep business information private. High cost of credit, strict collateral needs and lack of awareness also push many to stay outside the formal capital market. The new partnership directly targets these gaps through education and hand holding.
MSMEs in India: Economic Backbone and Current Definition
MSME stands for Micro, Small and Medium Enterprises, governed by the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. The Ministry of Micro, Small and Medium Enterprises is the nodal ministry. As per the revised classification that came into effect on 1 April 2025 after the Union Budget 2025 announcement, an enterprise is classified based on both investment in plant and machinery or equipment and annual turnover.
| Category | Investment Limit | Turnover Limit |
|---|---|---|
| Micro Enterprise | Up to ₹2.5 crore | Up to ₹10 crore |
| Small Enterprise | Up to ₹25 crore | Up to ₹100 crore |
| Medium Enterprise | Up to ₹125 crore | Up to ₹500 crore |
This revised definition raised the investment limit by 2.5 times and doubled the turnover limit compared to the earlier 2020 criteria, to help firms grow without quickly losing MSME benefits.
The sector is vital for the economy. MSMEs contribute about 30 percent to India’s GDP, about 40 to 45 percent to manufacturing output, nearly 46 percent to total exports, and employ more than 12 crore people, which is about half of industrial employment. The sector has about 633.88 lakh units, with 99 percent being micro enterprises, and around 20.37 percent are run by women. The country has an estimated 8 crore MSMEs in total, many of which are still not fully aware of government schemes and financing options.
Significance of the Partnership
The MoU matters for several reasons. It bridges the awareness gap. Earlier BSE outreach had already included seminars across the country and tie ups with associations, but partnering with PHDCCI extends that reach directly to its large member base through a pan-India network.
It also democratises access to capital. The SME platform addresses the missing middle problem, where firms are too large for microfinance but too small for main board listing or large bank loans. By guiding firms to IPOs, the pact helps them formalise, adopt better governance and become more attractive to investors.
For the capital market, it broadens the issuer base and supports financial inclusion. More SME listings mean more investment options for the public and a deeper market. For MSMEs, it can lower the cost of funds, provide long term money for working capital, debt repayment, research, expansion and technology upgrades, and create a clear path to the main board and to larger investors.
In the broader economy, stronger MSMEs support balanced regional development, rural industrialisation and job creation, while reducing pressure on the banking system.
The Way Forward
The immediate next steps under the MoU are joint awareness and capacity building programmes at state, district and cluster levels. These will cover the benefits of listing, eligibility criteria, documentation, DRHP preparation, pricing of the issue, compliance obligations and post-listing responsibilities such as disclosures and governance norms.
Over time, the partners will need to track how many MSMEs move from awareness to actual DRHP filing, list successfully, and sustain performance after listing. Continued support from SEBI’s regulatory framework, including updated eligibility norms of November 2023 that require, for example, a minimum net worth of ₹1 crore for two preceding full financial years and a cooling period of six months after withdrawal or rejection, will shape quality.
If implemented well, the model can be replicated with other chambers and industry bodies. The key will be ensuring that firms get affordable and trustworthy merchant banker support, maintain transparent accounting, and understand that listing brings both capital and discipline.
Key Takeaways
- BSE and PHDCCI signed an MoU on 17 August 2026 in New Delhi to promote equity financing for MSMEs through capital markets, mainly via the BSE SME Platform.
- The MoU was signed by Sundararaman Ramamurthy (MD and CEO, BSE) and Dr. Ranjeet Mehta (CEO and Secretary General, PHDCCI).
- BSE will provide experts and trainers for awareness programmes, seminars, workshops, roadshows and knowledge sessions, while PHDCCI will mobilise MSMEs through its member and regional network and a nodal point mechanism will guide firms on listing.
- BSE Limited, established in 1875 on Dalal Street, Mumbai, is Asia’s oldest stock exchange and was the first in India to get permanent recognition under the Securities Contracts (Regulation) Act, 1956.
- PHDCCI, established in 1905 and headquartered at PHD House, New Delhi, stands for Progress, Harmony and Development and is represented on more than 130 central and state advisory bodies.
- The BSE SME Platform, launched on 13 March 2012 after SEBI approval on 27 September 2011, provides lighter compliance, mandatory market making for three years and a migration route to the main board after two years.
- As of August 2026, 763 companies have listed on BSE SME raising ₹17,471 crore, with 203 companies migrated to the main board, while together BSE SME and NSE Emerge have enabled more than 1,200 companies to raise nearly ₹27,000 crore.
