Mainboard transition proves challenging as SMEs face stricter norms

The transition of small and medium enterprises (SMEs) from India's stock exchange SME platforms to the mainboard has become increasingly challenging due to stricter regulatory standards. Over the past decade, while the SME platforms were designed as a launchpad for growth, the rate of migration has significantly declined, especially in recent years. Data from Prime Database indicates that the number of SMEs upgrading to the mainboard fell from a peak of 65 in 2021 to just three in 2025. This slowdown is largely attributed to enhanced quality-control measures implemented by both BSE and NSE, aimed at filtering out smaller, less viable companies. Starting January 2024, SMEs must now maintain a minimum listing tenure of three years to qualify for migration, a shift from the previous two-year requirement. Additionally, new financial benchmarks have been established, including a market capitalization of Rs 100 crore and a mandatory average EBITDA of Rs 15 crore over three years. These changes reflect a concerted effort by the exchanges to ensure that only financially robust companies transition to the mainboard, thereby safeguarding market integrity. With the increasing complexity of the migration process, SMEs must navigate not only financial criteria but also compliance checks, raising concerns about the future accessibility of the mainboard for smaller entities.