The National Stock Exchange of India (NSE), on April 20, 2026, issued a circular revising the methodology for computing Free Cash Flow to Equity (FCFE) for SMEs seeking listing on NSE EMERGE. The revision modifies the earlier eligibility criterion requiring positive FCFE in at least 2 out of 3 preceding financial years.
Under the revised framework, FCFE will now include proceeds from issuance of capital (such as equity share capital, preference share capital, and securities premium) in addition to existing components like cash flow from operations, fixed asset purchases, and net borrowings. This change is applicable with immediate effect for all Draft Red Herring Prospectuses (DRHPs) filed on NSE EMERGE.
All other listing criteria remain unchanged, and the exchange has also issued clarifications through FAQs to guide participants. The circular is issued under the regulatory framework governing stock exchanges, including oversight by the Securities and Exchange Board of India.
[Circular Ref. No. NSE/SME/73818 | Circular No. 01]
