SME IPO means an initial public offering or first-time share sale offer by a small and medium company. To issue a SME IPO, the post-issue paid-up capital shall not exceed Rs 25 crore face value of shares. In India, there are two SME platforms; BSE SME and NSE SME (NSE Emerge) for listing SME shares.
About IPO
An IPO (Initial Public Offering) is a first-time share sale offer by a company to the
public to raise funds for growth.
There are two types of IPOs, Main Board IPOs and
SME IPOs.
The main difference between the two is based on issue size as main board
IPOs have bigger issue sizes than IPOs by small and medium-sized corporations.
There are other differences also relevant to paid-up capital, minimum number of
allottees, IPO prospectus vetting, underwriting, minimum application size, and
market making.
What is SME IPO?
What is Main Board IPO ?
Companies with a minimum post-issue paid-up capital of Rs 10 crore that go public by issuing shares are called Main Board IPO or regular IPO. Such companies’ securities are listed on the BSE and NSE exchanges.
What is Social Enterprised IPO ?
We also advise social enterprises for profit social enterprises (FPSE) and
non profit social enterprises various transactions.
We also assist social enterprises like in the trust, section 8 companies, co-operative societies in getting them listed on social stock exchange platform.
What’s I U Thakur & Associates LLP role in IPOS
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Preliminary Due Diligence with Legal Counsel and reply to Requisition
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Identification of pending litigation of Promoters, Directors, KMPs, Subsidiaries, and Associates and update MIS tracker
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Preparing Promoter Matrix for identification of Promoters and Promoter Group
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Organization Structure and
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Composition of Board & its Committees
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Drafting Codes & Policies for Corporate Governance / for Disclosure in DRHP and lots more to offer
Advantages of IPO
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Visibility & Credibility (Brand, status, reputation, tie ups)
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Operational Excellence (Bank loan, credit ratings, interest rates)
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Unlock equity value (Wealth maximization)
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Shares as currency (M&A, takeovers, collaterals)
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Talent Retention (ESOPs)
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No need to borrow from the bank and pay interest.
Wrapping Up
Evidencing the differences between the mainboard and SME IPO, it can be said that launching SME IPO is the best route for SME companies who are planning to expand their business in the near future.It drives the following benefits to the issuer company:
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Relaxed regulatory norms and easy shares listing process for IPO-ready SME companies.
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Once a SME list its shares on the SME platform, it has to report half-yearly financial statements. Moreover, companies just have to display their financial results, publication is not mandatory.
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After completing 2 year of the listing period, a SME can move to the mainboard IPO exchange by complying with the exchange migration policy.
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Direct listing on Mainboard IPO is a costly affair whereas listing on SME exchanges save a huge sum of money.
How can I U Thakur & Associates LLP help ?
We can help in guiding Companies in advising which type of platform suitable for their IPO
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Helping in checking with the pre requisites of IPO
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Planning in IPO
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Financial Stability
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Scalability
Approval of Investors & alignment with the Management Team :
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Governance Practices
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Setting up the Processes & MIS
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Technology Automation
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Internal Control
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Cultural Changes
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Risk Management
frequently asked questions
FAQ's for IPO ?
If Issue is Not Fully Subscribed What Happens ?
The SME IPO must be 100% underwritten, and 15% underwriting should be from the merchant banker's account.
We Don’t Know Any Merchant Bankers Can You Help ?
We are connected with various Merchant Bankers we connect you for the same.
How Much Time It Takes to Get IPO ?
It takes 3 to 4 months to issue a SME IPO to the public.
Main Board IPO takes nearly 8 to 10 months or more to make a public offer.
Is SEBI Approval Mandatory for IPOS ?
SEBI Approval Not Required for SME IPO.
SEBI Approval Required for main Board IPOS.
