When can a company issue an IPO?

A company can issue an IPO when it qualifies the SEBI-prescribed entry norms and other criteria as laid down by NSE and BSE.

For a company to issue an IPO, it should have :

• Positive Networth.
• Market capitalization of more than Rs 25 crores.
• Post Issue paid-up capital of more than Rs 10 crores.
• Satisfy either of the below SEBI IPO Entry Norms.
  1. Profitability Route (Entry Norm I)
     • Net Tangible Assets -Rs 3 crores (Cash and Cash Equivalent not more than 50% in case of Fresh Issue)
     • 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 the new name.
  2. QIB Route
     • Book Building Process.
     • Allot 75% to QIB.
     • Refund IPO Money, if allotment criteria are not met.