You are the Company Secretary of Peeka Ltd., a Small and Medium Enterprise (SME). The Managing Director of your company has asked you to give advice and submit a report on the benefits and exemptions available for securi

Benefit for listing of Peeka Ltd. at SME Exchange Going for a public issue of capital would provide the SMEs with equity financing opportunities to grow their business - from expansion of operations to acquisitions. In addition, equity financing lowers the debt burden leading to lower financing costs and healthier balance sheets for the firms. The continuing requirement for adhering to the stock market rules for the issuers lowers the on-going information and monitoring costs for the banks. With the SME Exchanges the SMEs can access capital markets easily, quickly and at lower costs through SME exchange to provide better, focused and cost effective service to SME sector. Some of the Benefits of the SME Exchanges are: Easy access to Capital: SME provides an avenue to raise capital through equity infusion for growth oriented SME's. Enhanced Visibility and Prestige: The SME's benefit by greater credibility and enhanced financial status leading to demand in the company's shares and higher valuation of the company. Encourages Growth of SMEs: Equity financing provides growth opportunities like expansion, mergers and acquisitions thus being a cost effective and tax efficient mode. Enables Liquidity for Shareholders: Equity financing enables liquidity for shareholders, provides growth opportunities like expansion, mergers and acquisitions, thus being a cost effective and tax efficient mode. Equity financing through Venture Capital: Provides an incentive for Venture Capital Funds by creating an Exit Route and thus reducing their lock in period. Efficient Risk Distribution: Capital Markets ensure that the capital flows to its best uses and that riskier activities with higher payoffs are funded. Employee Incentives: Employee Stock Options ensures stronger employee commitment, participation and recruitment incentive. Chapter IX of the SEBI (ICDR) Regulations, 2018 deals with the public offer by the small and medium enterprises, the chapter provides lesser and simplified compliance requirements in comparison to the listing on the main board. Under the following regulations exemptions are available for securities at SME Exchange: Filing of draft offer document- The company is not required to file draft offer document In-principle approval from the recognized exchanges- The company is not required to obtain in-principle approval from the recognized exchanges. Submission of certain documents before opening of an issue- Since the board is not issue any observation on the offer documents of SME, the SME Companies are exempted for submission of some of the due diligence certificates before opening of an issue. Draft offer document to be made to the public- The Company is not required to make the Draft offer document available to public for comments. Minimum Application Value related provisions. Minimum Application size in case of SME Listing is one lakh rupees per application.