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The Process of SME IPO - Step-by-step Guide to Schedule IPO

Published on Saturday, April 14, 2018 by Chittorgarh.com Team | Modified on Thursday, May 23, 2019

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What is SME IPO Process in India?

Small and medium enterprise Initial Public Offer (SME IPO) is the process when an unlisted SME company sells its shares to the public for the first time and listed on the stock exchange for trading. IPO Process makes a private SME company to a public limited company.

The process of SME IPO is also known as SME company 'going public'.

Fundraising through IPO is a complex process. It involves many legal processes, audits, and professionals to help with the process. Some of the critical players in this process include:

  • Company Promoters
  • SME IPO Assistants
  • Registrar of Companies (RoC)
  • Merchant Banker or Investment Banker
  • Bankers
  • Registrar and Transfer Agents (RTA)
  • Market Maker
  • Depositories (CDLS, NSDL)
  • Stock Exchanges (BSE or NSE)
  • Auditors

SME IPO Process Steps (High Level)

IPO process is easy for SMEs in comparison to mainline IPO. But it is still a long and complicated process. It takes at least 4 months from the day company appoints a lead manager.

  1. Appointment of Merchant Banker
  2. Capital Structuring, Due Diligence, and Pre-IPO preparation
  3. Appointment of Bankers, Registrar, Market Makers, RTA etc.
  4. Preparation of Offer Document (DRHP)
  5. Filing of DRHP with Stock Exchange
  6. Approval from Exchange and RoC
  7. Issue Pricing
  8. The Opening of Public Issue
  9. Closure of the Issue & Allocation of Shares
  10. Listing & Trading at the Exchange

SME IPO Process Steps with Timelines

Below are the activities an SME company must take to get listed through IPO route:

SME IPO Process Schedule
Sr. No.ActivityTimeline
1Conversion of Company into Public Limited Company, if applicableX
2Preparation of Documents for conversion and submission to the Registrar of Companies (RoC) for approval. Documents includes Alteration of Memorandum, Articles & filing of necessary forms for appointment of aforesaid directors.X+7
3ROC approval for conversionX+9
4Identification & appointment of Registrar and Transfer Agents (RTA or R & T Agent).

Submission of Master Creation forms with NSDL, CDSL for establishing connectivity.
X+11
5Appointment of Managing Director, Whole Time Director, Independent Directors, Company Secretary.

Deciding about their pay, sitting fees etc.
X+14
6Constitution of committees including Audit, Shareholder Grievance and Payments. X+17
7Preparation of website of the Company & hosting code of conduct on the websiteX+21
8The signing of Tri-Partite Agreement with NSDL & CDSL and receipt of ISINX+24
9Identification & appointment the peer review auditors. Get the financials of last 5 years restated and for last 1 year re-audited from peer review auditors.X+26
10Appointment of Merchant Banker & Market MakerX+29
11Preparation of Project Report and Draft Red Herring Prospectus (DRHP)X+33
12Filing of Draft Red Herring Prospectus (DRHP) with stock exchange along with an application for in-principle approval with the stock exchangeX+38
13Clearance from stock exchangeX+75
14Filing of Prospectus with ROC & getting it cleared from ROCX+80
15Filing of Final Prospectus with Stock exchange and SEBIX+87
16Opening of the IssueX+90
17Closing of the IssueX+93
18Finalization of Basis of Allotment by RTA & submit to the Stock exchangeX+96
19RTA & Issuer to process corporate action to carry out lock-in for pre-issue capital held in depository system.X+96
20Filing of corporate action form with NSDL & CDSL and demat credit of sharesX+97
21Filing of listing application with the Stock exchange to give listing and trading permission.X+98
22Post Issue Advertisement in a English, a Hindi and a Bengali Newspaper with the wide circulation within 10 days of completion of all activities.X+98
23Receipt of trading approval from Stock exchangeX+99

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5 Comments

avatar
5. Tejas  Feb 28, 2019 19:42 Reply
How much turn over last 3 year
Whats about share capital
avatar
4. Dr aloke  Feb 23, 2019 19:36 Reply
Nice write up about sme ipo
avatar
3. Irfan Rangrej  Jan 3, 2019 02:14 Reply
I want to know more about sme ipo.
avatar
2. Nitin  Jun 21, 2018 11:21 Reply
Can a new company launched SME IPO. if not then what's the criteria.
avatar
1. vikas grawal  Apr 16, 2018 11:59 Reply
Nice detail. Thank you. I am interested in sme ipo for my company. I will send my contact number.



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