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When can a company issue an IPO?

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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.

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