SME companies list on a separate SME platform of the exchange (NSE Emerge or BSE SME) under SEBI eligibility norms that are more relaxed than a mainboard IPO's on company size and track record — but stricter on a few others, like minimum application size and underwriting.
What are the listing requirements for an SME IPO?
- Track record: at least 3 years of operations (or, as an alternative, funding from banks/financial institutions, or 2 years as a listed group company).
- Profitability: an operating profit (EBITDA) of at least ₹1 crore from operations in at least 2 of the 3 previous financial years, and a positive net worth.
- Net worth: at least ₹1 crore.
- Post-issue paid-up capital: between ₹1 crore and ₹25 crore.
- Minimum allottees: at least 200 investors must be allotted shares.
- Underwriting: the issue must be 100% underwritten.
- Market making: the merchant banker must commit to market-making for 3 years from the listing date.
How is this different from a mainboard IPO?
| SME IPO | Mainboard IPO | |
|---|---|---|
| Track record | 3 years (or alternative route) | 3 years, plus a profitability or QIB-heavy alternate route |
| Profitability | Operating profit (EBITDA) ≥ ₹1 crore in 2 of the 3 previous years | Average operating profit ≥ ₹15 crore over the preceding 3 years, with an operating profit in each year |
| Net worth / net tangible assets | Net worth ≥ ₹1 crore | Net tangible assets ≥ ₹3 crore in each of the last 3 years |
| Post-issue paid-up capital | ₹1 crore – ₹25 crore | ≥ ₹10 crore |
| Minimum application size | 2 lots, worth more than ₹2,00,000 | ₹10,000–15,000 |
| Minimum allottees | 200 | 1,000 |
| Underwriting | Mandatory, 100% | Not mandatory |
| Market making | Required for 3 years post-listing | Not required |
| Financial reporting after listing | Half-yearly | Quarterly |
In short: SME eligibility is easier to clear on company size and track record, which is the point — it gives smaller, younger companies a listing route. What it adds back is investor-protection weight elsewhere: a much higher minimum ticket size, mandatory underwriting, and a market-making commitment that mainboard issues don't carry.
Does the listing timeline differ for SME IPOs?
No — SEBI's T+3 listing timeline (issue closes → allotment on T+1 → shares credited and blocked funds released by T+2 → listing on T+3) applies uniformly to SME and mainboard issues; there's no separate SME timeline.
Things to keep in mind
- These are exchange/SEBI eligibility rules for the company going public — they don't affect how you apply as an investor. You can apply for SME IPOs through Rupeezy, and browsing, bidding and tracking an SME issue works exactly like a mainboard IPO — see How do I apply for an IPO?
- The minimum application size for individual investors — 2 lots, worth more than ₹2,00,000 — comes from the same SEBI rule as the listing eligibility criteria above — see What is the minimum lot size for individual investors to apply for an SME IPO?