Kolkata, Sep 16 (IANS): The Small Industries Development Bank of India (SIDBI) is working with the National Stock Exchange (NSE) to set up a separate exchange for small and medium enterprises (SMEs) which will be launched shortly.

"It will be a separate exchange within the NSE. It is likely to be operational in this financial year...may be another two months or three," SIDBI Chairman and Managing Director S. Muhnot told reporters here Thursday.

The SMEs would be able to raise equity from the market through the exchange and develop their business, he added.

"The international venture funds, which are not coming to the MSME (Micro, Small and Medium Enterprises) sector today, will also come in the sector," he said.

Muhnot said SIDBI has been working to get the companies into the exchange.

"We will create funds for the market makers. We will launch Nominated Investors Liquidity Fund which will help these market makers," he added.

Muhnot said the Nominated Investors Liquidity Fund of about Rs.60 crore will be launched this year.

He said the second fund will be India Opportunities Fund of Rs.500 crore. "A third fund is under discussion. It may be of another Rs.300 crore."

"Our target is to have at least 10 to 15 companies in a year on this exchange," the chairman said.

On whether SIDBI will launch a separate subsidiary for capital market operation, he said: "Right now we are working on capital market through our own division...and ultimately it will be a subsidiary."