It has been three months since the BSE's SME Exchange saw its first listing. While the exchange is bullish, SMEs say listing is easier said than done, according to a report by CNBC-TV18's Ronak Jain.

BCB Finance became the first company to list on the BSE's SME Exchange and a second company is expected to ring the bell this Wednesday. This has exchange officials hoping this is the start of something big.

Asish Kumar Chauhan, deputy CEO of BSE said, "Already one company BCB Finance has listed on the exchange, second company Monarch Health Care has completed their IPO last week and they will be listed next week on may 30. The third company Max Alert Systems is also going to start their IPO in the first week of June, we see this trickle has started but it has a potential to be a deluge."

However, SMEs say there are still some issues that need sorting out.

Mahavir Lunawat, chairman of the West India Regional Council, ICSI said, "There are issues in terms of regulatory challenges. One of the initiatives and proposal in the Budget is that private equity when they offer the share for sale in an IPO they are not liable to pay tax on that so probably this facility will be extended to SME sector also.

They add that some of the rules make it difficult for merchant bankers to sell these IPOs.

Lunawat added, "There has to be a100 percent issue underwritten by merchant bankers. Merchant bankers also have to kind of assure a particular portion of the IPO. There has to be a specified number of markets making of lets say two to three years. So companies are finding it difficult in terms of insuring this kind of market making merchant banker probably are also finding it difficult."

Also, only institutional investors and high net worth individuals can invest in an SME and this means a smaller market.

The regulatory framework which is designed to safeguard investors, is throwing up obstacles for SMEs who want to list. Analysts warn that the exchange may not achieve its goal of having 100 listings within the next 15 months.