Eligibility criteria for SME IPO

Eligibility criteria for SME IPO

SEBI Guidelines

  • Max Post Issue capital – Rs.25 crores
  • Min No. of members for Issue – 50
  • After listing, no min no. of members required to be continued
  • Market making – Mandatory for 3 years
  • Underwriting – 100% (Merchant Bankers to underwrite 15% in own account)
  • Minimum application and Trading Lot size – Rs.1,00,000/- or in multiples thereof

BSE Guidelines

  • Net Tangible assets of at least Rs.3 crores as per the latest audited financial results
  • Net worth (excluding revaluation reserves) of at least Rs.3 crores as per the latest audited financial results.
  • Track record of distributable profits in terms of sec. 123 of Companies Act, 2013 for at least two years out of immediately preceding three financial years and each financial year has to be a period of at least 12 months. Extraordinary income will not be considered for the purpose of calculating distributable profits. 
    Net worth shall be at least Rs. 5 crores.
  • The post-issue paid up capital of the company shall be at least Rs.3 crores.
  • Other Requirements:
    • The Company shall have a website
    • The company shall mandatorily facilitate trading in demat securities and enter into an agreement with both the depositories.
    • There should not be any change in the promoters of the company in preceding one year from date of filing the application to BSE for listing under SME segment.
  • Certificate from the applicant company / promoting companies stating the following:
    • The Company has not been referred to the Board for Industrial and Financial Reconstruction (BIFR).
    • There is no winding up petition against the company that has been accepted by a court.

    Note: Cases where company is out of BIFR are allowed.

  • Listing Process will also involve
    • Visit to the registered office of the Company by BSE officials to verify general documents and processes followed in the Company.
    • Promoters to attend an interview with the Listing Advisory Committee.
  • Migration from BSE SME Exchange to the main Board of BSE:
    • It is mandatory for the company to be listed and traded on the BSE SME Platform for a minimum period of two years.
    • Post issue capital should be more than Rs.10 crores and upto Rs.25 crores.
    • Shareholders’ approval to be sought by special resolution passed through postal ballot – In postal ballot, the votes cast by shareholders other than promoters in favour of the proposal to migrate to Main Board should be at least two times the number of votes cast by shareholders other than promoter shareholders against the proposal to migrate to Main Board.
    • To fulfill the eligibility criteria for migration to Main Board – The companies seeking migration to Main Board of BSE should satisfy the eligibility criteria as specified in 26 of SEBI (ICDR) Regulations, 2009 either at the time of initial listing on SME platform or at the time of seeking migration to Main Board. However, same will not be applicable where the company had sought listing on SME platform by following the book building process and as per the requirements prescribed in 26(2) of SEBI (ICDR) Regulations, 2009.

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