SME IPO

What is SME in India?

SME in India refers to Small and Medium Enterprises. These are enterprises with a workforce, turnover and investment below a specified threshold. SMEs in India include both service and manufacturing businesses. These small and medium enterprises are segregated on the basis of investments made in equipment and plant and machinery and annual turnover.

The investment threshold for small enterprises is between Rs. 1 crore and Rs. 10 crore while the threshold limit for turnover is between Rs. 5 crore and Rs. 50 crore. In case of medium enterprises, the investment threshold is not more than Rs. 50 crores and turnover threshold is also not above Rs. 250 crore.

What is an SME IPO?

SME IPO refers to small and medium enterprises initial public offering. SME IPO is a process wherein small and medium sized companies go to the general public to raise capital. There are certain criterias companies to be eligible for SME IPO in India.

What companies are eligible for SME IPO in India?

There are some basic features that a company needs to qualify for an SME IPO:

The companies should have a post-issue capital of minimum Rs. 1 crore and maximum Rs. 25 crores.

Companies must have a track record of minimum three years.

The companies must have a positive net worth.

Companies should have a net tangible asset of Rs. 1.5 crores.

There should be an official website of the company.

The company should be incorporated under the Companies Act, 1956.

Why do SME need a separate IPO?

More than any financial benefit, having a separate Stock Exchange and IPO has made it much easier for investors to locate the growth of SMEs in India.

What do you need to be listed on the SME exchange?

The only criteria of being categorized as an SME also depends on being capped at Rs 25 Crores. If any company exceeds this amount, they will automatically be shifted to the mail Stock Exchange.

What requirements need to be fulfilled before listing on SME Exchange?

There are quite a few requirements that need to be fulfilled before a company can be listed on the SME Exchange:

Detailed information about the past performance of the company

Conversion of private limited company to a public limited company

Mentions all possible business activities.

Disclose assets, shareholding pattern, etc. for future investors.

Keep all Annual Reports ready

Create a website for your organization.

These are just some of the requirements you need to fulfill in order to enter the listing on SME Exchange in India.

What are the fees to be listed on an SME IPO?

The usual fee is Rs 50,000. However, this is just for a one time listing and it may change with every listing. It is important that you keep a check on all the conditions and requirements every time you have to enlist your organization for an SME IPO.

Can a suspended company continue with their SME IPO listing?

If the company has been suspended or banned for any number of reasons, they cannot join the SME listing back again till the suspension has been revoked. The suspension can only be lifted by the main board of the BSE.

How can you check for bidding details on upcoming SME IPOs?

Since the operations for both the NSE and the BSE have moved online, you can easily check on all the information you want about the Stock Exchange on their website itself. They have a separate listing section for all the upcoming IPO listings and all their given information. The exact details for the bidding will only be issued a few days before the SME IPO will go live in the market. This is why it is important for you to keep an eye out for this information on their websites.

What is the annual maintenance cost on the SME platform?

The annual fees for every organization is a minimum of Rs 25,000 or 0.01% of the full market capitalization, whichever one is higher. However, this cost too can keep changing with time and with each listing. This is why it is important for you to keep an eye out for all the details before you sign anything and enlist your organization on the BSE SME IPO.

Can a person apply for multiple IPOs from the same account?

You can opt for multiple listings and other investing opportunities like mutual funds and even fixed deposits through the same DEMAT account. You do not need a separate DEMAT account to opt for one or multiple SME IPO listings. That is the whole purpose of a DEMAT account. The government wants to make the process of investment easy for you.

Can retail investors apply in the SME IPOs?

Of course, they can. There is a portion saved within SME IPOs exclusively for retail investors. However, the minimum amount of investment for them is Rs 1,00,000.