SME IPO: Eligibility Criteria for SMEs and Growing Startups for Listing

Sr. No.

Parameters

Conditions

1

Post Issue Paid Up Capital

The post-issue paid-up capital of the company (i.e., face value) should not be more than Rs. 25 crores.

2

Net Worth

The net worth of the company should be positive.

3

Tangible Asset

The net tangible assets of the company should be Rs. 1.5 crores

4

Track Record

• The company or the proprietorship, partnership or LLP that has been converted into a company should have a combined track record of at least 3 years or,
• In case the company has not completed 3 years, then the company, proprietorship, partnership firm or LLP should have been funded by the banks, financial institutions or government or
• The group company should have been listed for at least 2 years on the main board or SME board of the stock exchange.

5

Positive Cash Flows

The company or the firm that has been converted into the company should have combined positive cash accruals (earnings before depreciation and tax) in any of the years out of the last 3 years and the net worth of the same should be positive.

6

Other Requirements

• The company should have its own website.
• The company should mandatorily facilitate the trading of securities in dematerialised form and should enter into an agreement with both depositories.
• The promoters of the company should not change in the preceding one year from the date of filing the application for listing under the SME segment to the stock exchange.
• The applicant company or the promoting company should file a certificate stating that the company has not been referred to the Board for Industrial and Financial Reconstruction (BIFR). Further, there shouldn’t be a winding up petition against the company and being admitted by the court or there shouldn’t be an appointment of any liquidator.

Sr. No.

Parameters

Conditions

1

Post Issue Paid Up Capital

The post-issue paid-up capital of the company (i.e., face value) should not be more than Rs. 25 crores.

2

Track Record

The company should have a track record of at least 3 years of either:

• The applicant that is seeking listing or
• The promoters or the promoter company incorporated in or outside India or
• Proprietorship or partnership firm that is subsequently converted into a company and approaches the stock exchange for listing

3

Cash Accruals

The company or the firm that has been converted into the company should have combined positive cash accruals (earnings before depreciation and tax) from operations in at least 2 years out of the last 3 years and the net worth of the same should be positive.

4

Other Conditions

• The company has not been referred to the erstwhile Board for Industrial and Financial Reconstruction (BIFR). Further, no proceedings should have been admitted under the Insolvency and Bankruptcy Code against the promoting or the issuer company.
• The company should not have received any winding-up petition admitted by the court or NCLT. There should not be any disciplinary or regulatory action by a stock exchange or any regulatory authority against the applicant company in the past 3 years.

5

Disclosure

The company should disclose the following in the offer document:

• Any material regulatory or disciplinary action by a stock exchange or regulatory authority in the past one year in respect of promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) of the applicant company.
• Defaults in respect of payment of interest and/or principal to the debenture/bond/fixed deposit holders, banks, FIs by the applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) during the past three years.
• The applicant, promoters/promoting company(ies), group companies, companies promoted by the promoters/promoting company(ies) litigation record, the nature of litigation, and status of the litigation.
• In respect of the track record of the directors, the status of criminal cases filed or the nature of the investigation being undertaken with regard to the alleged commission of any offence by any of its directors and its effect on the business of the company, where all or any of the directors of the issuer have or has been charge-sheeted with serious crimes like murder, rape, forgery, economic offences.