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The Over the Counter Exchange of India (OTCEI)

OTCEI (Acronym for Over The Counter Exchange of India) was established by various financial institutions like ICICI, UTI, IDBI and IFCI. The purpose of establishing OTCEI is to provide a source of financing to small and medium enterprises and also to provide an exit route for venture capitalists.

It is totally a paper less exchange with all the trades done and settled online. It also facilitates the small firm to access the capital market through initial public offering (IPO) and provides guidance and advice to such firms through their relationship officers.

Earlier securities listed on other stock exchanges were not permitted to be listed on OTCEI but currently this restriction has been removed.

There is also a proposal to allow all IPOs to be compulsorily listed on OTCEI. OTCEI also permits trading of unlisted securities by qualified participants like FIIs, Mutual funds, etc.

Now even a small firm can approach OTCEI for financing through negotiated deals and also for listing purposes instead of approaching the various financial institutions individually to get finance thus saving both on time and cost of financing.

The salient points of the OTCEI exchange has been summarized below:

  • Minimum size of the firm, which can go for listing, is with paid up capital of Rs. 30 lakhs
  • Participation by only Qualified Participants (QPs) in unlisted securities
  • Availability of Market makers for providing liquidity through constant two way quotes
  • Availability of relationship officers who will help the entrepreneur
  • Pricing of issues through book building
  • Funds can be raised without going public if the venture capital fund is registered with the exchange
  • Underwriting cover available through a re-insurer providing adequate safety to investors
  • 3-year track record requirement is not necessary for a firm to go public as in other exchanges

Back to Public Offer By Small Unlisted Companies

Listing requirements for IPO through OTCEI
Addresses of OTCEI offices throughout the country

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