3. SME IPO Listing – Key Requirements & Eligibility Norms

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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/N	Eligibility Criteria’s	BSE SME Requirement	NSE Emerge Requirement
1	Post Issue Capital (FV)	Minimum: Rs 3 CrMaximum: Rs 25 Cr	Maximum: Rs 25 Cr
2	Track Record	Net Tangible Assets: Rs 3 CrNet 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 yearsThe 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
3	Other Requirement	Mandatory facilitation of trading in Demat securitiesCertificate that no winding petition or reference to BIFRMandatory corporate websitePromoters to attend to interview with Listing Advisory CommitteeNo 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/N	Eligibility Criteria	Requirement
1	Public Shareholding	Minimum 25%
2	Minimum Subscribers in IPO	50 investors
3	Minimum application amount/trading lot	Rs 1 Lakhs
4	Underwriting	100% Mandatory (of which 15% to be done by MB in his own account)
5	Market making	Through exchange registered market makers for min 3 years
6	Offer Document	Not 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

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.