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SME IPO Listing - Key Requirements & Eligibility Norms

Published on Saturday, April 14, 2018 by Team | Modified on Thursday, April 20, 2023

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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: Rs 3 Cr
  • Maximum: Rs 25 Cr
  • Maximum: Rs 25 Cr
2Track Record
  • Net Tangible Assets: Rs 3 Cr
  • Net Worth: Rs 3 Cr (Rs 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 Rs 5 Cr. Profit before tax of Rs 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

S/NEligibility CriteriaRequirement
1Public ShareholdingMinimum 25%
2Minimum Subscribers in IPO50 investors
3Minimum application amount/trading lotRs 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
  • Rs 10 Cr paid up capital
  • < 500 shareholders - T to T group
  • Approval from 2/3 of non-promoters shareholders

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1. Alok Harlalka   I Like It. |Report Abuse|  Link|May 29, 2020 11:01:05 PMReply
I agree with your comments towards the opportunity what most of the MSMEs can get because of 50000 crore of funds are getting created for SMEs that really make the positive impact for getting the HNI, Family offices or Fund houses in the SMEs to invest in the IPOs or in the secondary market