Executive Summary

• A Public Limited Company (“Issuer”) can raise funds from public by issuing its equity shares through an Initial Public Offer (SME IPO) at the SME segment of the nationwide Stock Exchanges i.e. NSE Emerge or BSE SME, subject to the specified conditions.
• ~947 companies have raised INR ~16000 Cr through SME IPO (BSE SME/NSE Emerge) from January 2012 to March 2024, across 60+ industries with cumulative Market Cap. of INR ~2.5 Lac Cr as on 31 March 2024.
• During the period January 2021 to March 2024, ~399 companies have got listed at SME Stock Exchanges and raised INR ~9489 Cr which is ~42% in number and ~60% in value of the total SME IPOs.
• In the 3 month period January 2024 to March 2024, ~55 companies have got listed through SME IPO and raised funds amounting to INR ~1942 Cr.
• Average Size of SME IPO has increased to INR ~35 Cr in 2024 from INR ~14 Cr in 2021.
• Average Subscription of SME IPO has increased to ~232x in 2024 from ~19x in 2021.
• Nearly   320   companies   have      already   been     migrated   from      SME Board  to Mainboard.

Benefits of SME IPO

• Access to Equity capital and future financing opportunities
• Generates liquidity for Investors and Promoters
• Encourages growth of SME’s
• Easier Listing Norms, Process and reduced Timelines
• Only Stock Exchange approval required rather than SEBI approval
• 100% Underwriting of the Issue ensures success of IPO
• Relaxed Post Listing Compliances
• Unlocking of Shareholders Value
• Reduced Tax Rate on Listed Shares
• QIB Investors interest in SME IPO due to attractive Issue pricing
• Fair Value automatically assessed by Market, post Listing
• Enhanced Visibility and Credibility
• Better Reputation and Brand recall in Industry
• Better Corporate Governance
• ESOP benefits for Employee Retention
• Possible Transition to NSE / BSE Mainboard subject to specified conditions.

Key Preparation for SME IPO

• Converting Proprietorship / Firm / Pvt. company to a Public Limited Company
• Setting appropriate Capital Structure
• Increase in Authorised Share Capital, as required based on post issue capital structure
• Taking approval of Board of Directors and Shareholders of Company to approve issue of shares
• Restructuring of financials to align with longer term vision
• Information gathering for DRHP preparation and commitment of time and resources of legal and finance team, management and promoters
• Appointment of Company Secretory and CFO
• Appointing 50% Independent Board (including 1 Woman Director)
• Restating Financial statements for the last 3 years through Peer Reviewed Auditors (Financials shall not be older than 6 months at the time of submission of Offer Document with stock exchange)
• Getting the website/logos of the Company ready if not already there