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SME IPO Listing - Key Requirements & Eligibility Norms

Published on Saturday, April 14, 2018 by Chittorgarh.com Team | Modified on Saturday, September 8, 2018

Small and medium enterprise (SME) in India can raise money through Initial Public Office (IPO) and get listed at the Stock Exchanges. SEBI, the market regulator came up with the guidelines for SME companies to get listed on the exchange. Below are the key requirements and eligibility norms for SME Listing in India.

Exchange Eligibility Norms for SME IPO

Eligibility Norms for Listing at SME Platform
S/NEligibility Criteria'sBSE SME RequirementNSE Emerge Requirement
1Post Issue Capital (FV)
  • Minimum: ₹3 Cr
  • Maximum: ₹25 Cr
  • Maximum: ₹25 Cr
2Track Record
  • Net Tangible Assets: ₹3 Cr
  • Net Worth: ₹3 Cr (₹15 Cr for broking companies)
  • Distributable profits for at least 2 years out of preceding 3 completed FYs or Net worth shall be at least ₹5 Cr. Profit before tax of ₹5 Cr for broking companies
  • Track record of at least three years
  • The company should have positive cash accruals (EBDT) from operations for at least 2 financial years preceding the application and its net-worth should be positive
3Other Requirement
  • Mandatory facilitation of trading in Demat securities
  • Certificate that no winding petition or reference to BIFR
  • Mandatory corporate website
  • Promoters to attend to interview with Listing Advisory Committee
  • No change in promoter in preceding 1 year
  • The Company has not been referred to Board for Industrial and Financial Reconstruction (BIFR).
  • No petition for winding up is admitted by a Court of competent jurisdiction against the Applicant Company.
  • No material regulatory or disciplinary action by a stock exchange or regulatory authority in the past three years against the applicant.

Key SEBI Norms for SME Listing

SME Listing Norms
S/NEligibility CriteriaRequirement
1Public ShareholdingMinimum 25%
2Minimum Subscribers in IPO50 investors
3Minimum application amount/trading lot₹1 Lakhs
4Underwriting100% Mandatory (of which 15% to be done by MB in his own account)
5Market makingThrough exchange registered market makers for min 3 years
6Offer DocumentNot subject to SEBI observation.

SME to Main Board Migration Criteria

Following are the criteria's for migration for moving SME to Main Board:

  • The company should be listed on SME Platform for at least 2 years
  • ₹10 Cr paid up capital
  • < 500 shareholders – T to T group
  • Approval from 2/3 of non-promoters shareholders

Need help with SME IPO?

We have a dedicated team of experts who can take you through SME IPO process. We can help with any pre-IPO questions and handle end-to-end IPO Process for you. We also help SME companies with post listing compliance. Contact us today and we will give you a callback.

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