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What are the eligibility criteria for a company to issue an IPO?

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A company needs to satisfy the SEBI and exchange prescribed guidelines to be eligible to issue an IPO.

1. SEBI IPO Eligibility Criteria (Entry Norms)

  1. Profitability Route
    • Net Tangible Assets - Rs 3 crores
    • Net Worth - Rs 1 crore
    • Average Operating Profit -Rs 15 crores.
    • In case of a name change, 50% of the revenue should be from activity under a new name.
  2. QIB Route
    • Book Building Process.
    • Allot 75% to QIB.
    • Refund IPO Money, if allotment criteria are not met.

2. NSE IPO Eligibility Norms (NSE IPO Requirements)

  • Annual Reports of 3 years.
  • Promoter Experience of 3 years.
  • No pending proceedings for Insolvency or Bankruptcy.
  • No winding up notice received.
  • Positive Net worth.
  • Post Issue paid-up capital > Rs 10 crores.
  • Market Capitalisation > Rs 25 crores.

3. BSE IPO Eligibility Norms (BSE IPO Requirements)

  • Post-issue paid-up capital > Rs. 10 crores.
  • Issue size > Rs. 10 crores.
  • Market capitalization > Rs. 25 crores.

4. Other Prerequisites for Company /Promoters/Directors/Investors

  • No disciplinary action.
  • Not under capital markets debarment period directly or through association with any other corporation.
  • Cannot be defaulters, offenders or fugitive.
  • Own at least 20% of post-IPO equity capital.

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