Basic of Distinction | Main board | SME Segment(BSE SME) |
---|---|---|
Net tangible assets | Minimum Rs. 3 crores in each of the preceding 3 years | Rs. 1.5 crores |
Net Worth | At least Rs. 1 crore in each of the preceding 3 years | Positive net worth requirement |
Profit traating profitsck record average oper | Positive in each of the immediately preceding 3 years. At least Rs. 15 crores, calculated on a restated and consolidated basis, during the preceding 3 full years | Positive in at least 1 out of immediately preceding 3 years Not specified |
IPO grading | May obtain from credit rating agencies | Not required |
IPO underwriting | Not mandatory | 100% |
Minimum application value | Rs. 10,000- Rs. 15,000 | Rs. 1 Lac |
Minimum subscription | 90% | 100% |
Minimum no. of allottees | 1000 | 50 |
Approx timeline | 6-9 months | 3-5 months |
Costs (generally, based on research) | 6-8% fund raising | 10-15% of fund raising |
Post-issue paid-up capital | Minimum Rs. 10 crores Maximum not specified | Minimum not specified Maximum Rs. 25 crores |
Annual listing fees (based on paid-up capital) | Minimum Rs. 3,25,000 | Min Rs. 10,000 (in NSE SME) |
Corporate governance provisions under LODR | Applicable except for de-minimis exemption for such listed companies having both paid-up equity capital and net worth less than Rs. 10 crores and Rs. 25 crores respectively | Not applicable |
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Shares in an SME IPO are allotted through an offer period where investors submit bids within a price band. The bids are compiled in a book-building process to determine the final allotment price. Shares are then allocated to successful bidders based on their bid price and quantity requested. Unsuccessful bidders receive refunds, and the allotted shares are listed for trading on the stock exchange.
Note: Planify is not working as a stock exchange. Planify is a platform to facilitate connection between buyer & seller.
The merchant bankers or fund managers charge roughly 9% of fundraising and In totality the estimated expense would lie anywhere between ₹20 lakh to ₹1 cr.
The maximum amount of lot size in an SME IPO is ₹2 lakh.
The minimum amount of lot size in SME IPO is ₹1 Lakh.
Yes, It is reasonable to apply for an SME IPO as it provides small and medium-sized enterprises (SMEs) with access to capital that can fuel their growth and expansion plans. By going public, SMEs can tap into a wider investor base. Also, going public through an SME IPO can significantly enhance a company's visibility and credibility in the market. It helps to establish the company's brand and market presence, as well as gain recognition from customers, and other stakeholders.
However, the decision to apply for an SME IPO depends on various factors specific to the company and its growth objectives. It is not always the case but in some cases, it might happen.
Basis | SME IPO | Main Board IPO |
Company Size | These are Small & Medium Enterprises and are relatively small companies | These are large companies listed on the main board IPO. |
Listing Process | Simplified and streamlined process | More complex and involved process. |
Liquidity | The No. of shares that is trading volume in SME IPO would be less as compared to main board IPO. | In the main board IPO the trading volume would be more. |
Results Disclosure | Half-yearly results in case of SME IPO. | Quarterly Results |
Regulatory Requirements | Compliance with simplified listing and disclosure norms. | Compliance with comprehensive listing and disclosure norms. |
Lot Size | The lot size for SME IPO is ₹1 Lakh - ₹2 lakh. | The lot size for Main Board IPO is between 5000-15000. |
Maximum Issue Size | The maximum issue size in SME IPO tends to range between ₹10cr - ₹100 cr. | The maximum issue size in this case upto ₹100 cr and can extend to ₹15,000-₹20,000 crores. |
Fundraising Requirement | These companies are smaller in nature and therefore, there is more capital and more fundraising requirements for expansion and Smooth operations. | These companies are already in a later stage and competitive in nature, therefore they require limited fundraising and capital requirements. |
Growth Perspective | SMEs companies are smaller companies and there is more growth perspective as companies can move towards main board IPO and open the doors for more opportunities. | Companies already well-known or recognized in the market |
Investor Base | Retail and institutional investors. | Mainly institutional investors with larger investments such as Mutual fund investments are more in main board IPO. |
An SME IPO refers to an Initial Public Offering specifically designed for Small and Medium Enterprises (SMEs). An IPO is the process through which a company offers its shares to the public for the first time. This allows individuals and institutional investors to buy and trade those shares on a public stock exchange.
SME IPOs cater to smaller companies that have growth potential but may not meet traditional IPO criteria. These companies are often in their early stages of development and require access to capital to fuel expansion plans, invest in infrastructure, or finance research and development.
In India an SME exchange functions within a recognized stock exchange or the main exchange such as the BSE Limited and the National Stock Exchange of India.
Note: Planify does not work as a stock exchange. Planify is a platform to facilitate buyer & seller connection.