What is the SME exchange? Should you invest in companies listed on it?

Have you ever wondered about investing in start-ups, more specifically a stock that will give you multifold returns? Here, we are not talking about investing in venture capital or private-equity funds, which generally invest in many early-stage companies out of the belief that at least one of them will give terrific returns. Instead, our focus is on companies that are listed in an SME Exchange. What is an SME exchange? A company has to meet some criteria laid down by the SEBI to get its shares listed on a regular stock exchange. These include having an operating profit of Rs 15 crore in the last three years, the minimum post-issue market cap of at least Rs 25 crore, etc. But over a period of time, the need to allow even smaller/younger companies to raise money from the public through the capital markets was felt. Thus, such companies, referred to as SMEs (small and medium enterprises) were al