About

Capital for real businesses, on a lawful footing

MSME Exchange helps established Indian MSMEs raise equity from identified investors under Section 42 of the Companies Act 2013 — and refuses to become the thing that would make it easier and unlawful.

The problem

A profitable manufacturer in Coimbatore with fifteen years of audited accounts and a genuine order book is, for practical purposes, invisible to equity capital. Bank credit is collateral-shaped and does not fund growth. Venture capital is looking for a different kind of company. Listing on the SME platform of an exchange is achievable but demands a level of documentation, governance and process readiness that most such businesses have never had a reason to build.

What sits between those options is the private placement — a real, well-defined route in the Companies Act that lets a company raise from a limited number of identified investors. It is not obscure. It is simply procedural enough that most small companies never attempt it, and most investors never see the ones that do.

What we do about it

We do the procedural work: get a company’s records, filings and financials into a state where a placement can be documented properly; verify what can be verified and record exactly how; hold the offer, the commitments and the allotment paperwork in a form that stays reconstructable years later; and enforce the statutory limits — the 200-investor cap, the 60-day allotment clock — as the system’s own rules rather than as reminders.

For an investor, that means the information in front of you is traceable. Every check says which source answered it and on what date. Where a check has not been possible, it says so rather than being quietly omitted.

We are not an alternative to BSE or NSE

India already has SME platforms — BSE SME and NSE Emerge — and they are the right destination for a company that can reach them. We are not a substitute for either, not a competitor to them, and not a stock exchange of any kind. Where a company is ready to list, our job is to help it get there.

What those platforms require is not size. Neither prescribes a minimum turnover; both require roughly ₹1 crore of operating profit in two of the last three years, ₹3 crore of net tangible assets and a three-year track record, plus a merchant banker and a market maker for three years after listing. A growing business under ₹50 crore of turnover that is not yet solidly profitable is excluded by the profit test, not by its size — and that is the gap a private placement was designed for.

So we hold the company to the standards a listing would demand — verification before anyone sees a number, disclosure that carries its source and date, records that stay reconstructable — while doing none of the things only a recognised exchange may do. The rigour of an exchange; none of its functions.

What we will not build

Each of the following would make the product more appealing, and each would turn it into an unrecognised exchange or an unregistered intermediary. Under SCRA 1956 §2(j) a stock exchange is any body that assists in dealing in securities; a neutral matching venue is exactly what an exchange is, and neutrality is not an exemption.

An order book, price matching, or any venue where investors deal with each other
A secondary market or resale feature of any kind
A “current price” or price chart for an unlisted share
Recommendations, ratings, rankings or suitability scores
Guaranteed or projected returns, anywhere in the product
Any account controlled by us that holds investor money

How we build

Every claim carries a source and a date

A check records where the answer came from, when it was obtained, and what was actually returned — never a bare tick. A stale answer from an authoritative source is still stale, and an audit asks what was known at the time, not what is true now.

Disclosure, never advice

We publish verified facts about a business. We do not rate it, rank it, recommend it, or judge whether it suits you. That line is not caution for its own sake — crossing it would make this an investment adviser, which is a registration we do not hold.

We never hold your money

Subscription money goes from the investor to the issuing company’s own bank account. We are not in the path, which means there is no pooled account to be mismanaged, frozen or misappropriated.

The law is data, not code

Thresholds, limits and eligibility rules are stored with the dates they applied from. A decision taken under this year’s cap stays explicable in three years’ time, when the cap has changed.

Collect less, and say why

Every personal field we store has a reason recorded against it. Where a verification result will do, we keep the result rather than the document it came from.

Nothing significant happens without a record

For any verification, approval, transaction or compliance decision, the system can answer who acted, on what information, under which rule, and what changed afterwards.

Where we are today

It matters more to say this accurately than impressively: MSME Exchange is being built, and is not yet operating live placements. Several of the things a finished platform needs are contracts and authorisations rather than code — a licensed KYC provider, bank-account validation, a depository route for allotment, and formal sign-off from securities counsel on the boundary described above. Those are named as outstanding in our own documentation rather than papered over, and the platform will not report a check as verified when it has been run against a test environment.

If you are an MSME considering a raise, an investor, or a professional who works with either, we would like to hear from you — and would rather tell you what is not ready than find out later that it mattered.

SnxwFairies Innovations Private Limited · Write to us at contact address — not yet published