PUBLIC ISSUE:

1. Initial Public Offer

 100% Fresh issue of Capital
 100% Offer for Sale (OFS)
 Combine of Fresh issue + OFS
2. Further Public Offer (FPO)
 100% Fresh issue of Capital
 100% Offer for Sale (OFS)
 Combine of Fresh issue + OFS
3. Right Issue

ELIGIBILITY CRITERIA – PUBLIC ISSUES MAIN

BOARD

1. Paid-up Capital
The paid-up equity capital of the applicant shall not be less than 10 crores and the
capitalization of the applicant's equity shall not be less than 25 crores**

2. Conditions Precedent to Listing

The Issuer shall have adhered to conditions precedent to listing as emerging from
inter-alia from Securities Contracts (Regulations) Act 1956, Companies Act
1956/2013, Securities and Exchange Board of India Act 1992, any rules and/or
regulations framed under foregoing statutes, as also any circular, clarifications,
guidelines issued by the appropriate authority under foregoing statutes.

3. At-least three years track record of either:

The applicant seeking listing; or

• The promoters****/promoting company, incorporated in or outside India or

• Partnership firm and subsequently converted into a Company (not in existence as
a Company for three years) and approaches the Exchange for listing. The Company
subsequently formed would be considered for listing only on fulfillment of conditions
stipulated by SEBI in this regard.

For this purpose, the applicant or the promoting company shall submit annual
reports of three preceding financial years to NSE and also provide a certificate to the
Exchange in respect of the following:

 That the company has not referred to the Board of Industrial & Financial
Reconstruction (BIFR) &/OR No proceedings have been admitted under Insolvency
and Bankruptcy Code against the issuer and Promoting companies.
 • The company has not received any winding up petition admitted by a
NCLT

• The net worth of the company should be positive. (Provided this criterion
shall not be applicable to companies whose proposed issue size is more than Rs.500
crores)

[*Net Worth – as defined under SEBI (Issue of Capital and Disclosure Requirements)
Regulations, 2018.]

****Promoters mean one or more persons with minimum 3 years of experience of

each of them in the same line of business and shall be holding at least 20% of the
post issue equity share capital individually or severally.

4. The applicant desirous of listing its securities should satisfy the

exchange on the following:

 Redressal Mechanism of Investor grievance

The points of consideration are:

1. Details of pending investor grievances against Issuer, listed subsidiaries and top 5
listed group companies by Market Cap.

2. Arrangements or mechanism evolved for redressal of investor grievances

including through SEBI Complaints Redress System.

 Defaults in payment
Defaults in respect of payment of interest and/or principal to the
debenture/bond/fixed deposit holders by the applicant, promoters/promoting
company(ies), group companies, Subsidiary Companies shall also be considered
while evaluating a company's application for listing. The securities of the applicant
company may not be listed till such time it has cleared all pending obligations
relating to the payment of interest and/or principal.

5. Rejection cooling off period

The application of the applicant company should not have been rejected by the
exchange in last 6 complete months.

Note:

In case a company approaches the Exchange for listing within six months of an IPO,
the securities may be considered as eligible for listing if they were otherwise eligible
for listing at the time of the IPO. If the company approaches the Exchange for listing
after six months of an IPO, the norms for existing listed companies may be applied
and market capitalisation be computed based on the period from the IPO to the time
of listing.
Other IPO Requirements

 The company should obtain prior consent from the BSE to use the name of the
BSE in its prospectus or offer-for-sale documents.
 The issuing company should file an application with one or more exchanges
and designate one exchange as the Designated Stock Exchange.
 The issuer should have an arrangement with a depository (CDSL and NSDL) to
take care of dematerialization before and after the issue.
 The promoter's shares should be in demat form before filing the offer
document.
 The partly paid-up shares should either be fully paid up or forfeited before the
filing of the offer document.
COMPANY & AUDITORS DELIVERABLES:
1. Minimum 3 Years Ind AS Financial Statements (If as per AS – then Special
Purpose Ind AS Financial Statements to be prepared for previous years)

2. Consolidated Ind AS financial statements to be audited by an auditor

holding a valid Peer Review Certificate issued by ICAI

3. Audit Report/ Special Purpose Audit Report from Auditor on special

purpose consolidated financial statements for the last 3 years as per Ind-
AS

4. Audited Restatement of Financial Statements (SFS + CFS) for minimum 3

Years as per SEBI Regulations (IGAAP FS = Ind AS Adjustment = Ind AS FS
= Restatement Adjustment as per SEBI = Restated Ind AS FS)

As per SEBI (ICDR) Regulations, 2018, the financial statements are

required to be restated for the below stipulated areas:
Five Restated Adjustment to be done if any:
 Change in accounting policy
 Prior-period error
 Non-provisioning, regrouping, other adjustments
 Audit qualifications
 Change in estimates

5. Examination Report from Auditor on restated audited consolidated

financial statements of Company for the last 3 years as per IND- AS (to be
updated at RHP stage for stub period)
− Under ICDR Regulations: Not older than 6 months as on the date of filing
the DRHP, RHP and Prospectus
− As per Rule 144A and ICAI Guidance Note: Not older than 135 days
considered from the last audited period (RHP and Prospectus)

6. All subsidiaries (Indian and Foreign) consolidated in last 3 Fiscals to be

subjected to audit for such period. Exception for foreign subsidiaries if 1)
Such entities are not material and 2) No audit is required as per the laws
of its jurisdiction.

7. Board Resolution for approving IPO related activities, Materiality

Threshold, adoption of Restated Financial statements

8. Arrangement Letters + Comfort Letters between Auditors + BRLMs +

Company prior to filing of the DRHP, RHP, Prospectus and on Allotment

9. Circling exercise on the DRHP, RHP and Prospectus

10. Stub period comfort and negative assurance

11. Proforma Financials - Required in case of acquisition/ sale of

Material Subsidiary or businesses after the end of the latest disclosed
financial period
 12. Various Certificates approximately ranging 35 to 40 Certificates (on
Consolidated Financial Statements / RFS basis) to be issued depending on
the requirements of the IPO.

ELIGIBILITY CRITERIA FOR SME IPO

For the purpose of listing the company shall be incorporated as a Public Company
under the Companies Act, 1956 or 2013, or the entity shall be converted into a
Public Company.

At present, there are only two SME Exchanges in India i.e. (1) BSE SME
platform (BSE) and (2) NSE EMERGE Platform (NSE) and both have their
own eligibility criteria for SME listing in addition to the SEBI Guidelines
provided for the Listing.

CRITERIA FOR BSE LISTING: (BSE SME Platform)

1. Post-issue Paid-up Capital:

 The post-issue paid up capital of the company shall be at least Rs. 3
Crores and not more than 25 Crores.

2. Financials:

A. Net worth : (as per SEBI (ICDR) Regulations)

 Net worth (excluding revaluation reserves) of at least Rs.1 crore as per
preceding two audited financial results.

B. Net Tangible Assets:

 At least Rs.3 crores as per the latest (last) audited financial results.

C. Track Record:
 Distributable profits in terms of Section 123 of the Companies Act 2013
for at least two years out of immediately preceding three financial
years (each financial year has to be a period of at least 12 months).
Extraordinary income will not be considered for the purpose of calculating
distributable profits.
OR
 The net worth shall be at least Rs.5 crore.

3. Other Requirements:
 The Company shall have a Website.
 The company shall facilitate trading in demat securities and enter into an
agreement with both the depositories.
  There should not be any change in the promoters of the company in
preceding one year from date of filing the application to BSE for listing
under SME segment.
 The composition of the board should be in compliance with the requirements
of Companies Act, 2013 at the time of in-principle approval.
 100% of the Promoter’s shareholding in the Company should be in
Dematerialized form
 Leverage ratio of not more than 3:1. Relaxation may be-granted to finance
companies.
 No pending defaults in respect of payment of interest and/or principal to the
debenture/ bond/fixed deposit holders by the applicant company, promoters/
promoting company(ies), Subsidiary Companies.

4. Disclosures:
A certificate from the applicant company / promoting companies stating the
following:
 The Company has not been referred to the Board for Industrial and
Financial Reconstruction (BIFR). Note : Cases where company is out of
BIFR are allowed.
 There is no winding up petition against the company that has been
accepted by a court.

PROCEDURE OF LISTING
Restructuring of Pre-IPO Capital
Due Diligence & Pre-IPO Preparations
Valuation of Issue Pricing
Preparation of Draft Prospectus
Appointment of Intermediaries
Marketing Strategy
Preparation & Filing of Draft Prospectus with Exchanges
Issue Pricing & Allocation
Listing & Market Making
CRITERIA FOR NSE LISTING (NSE EMERGE Platform)

1. Post-issue Paid-up Capital:

The post issue paid up capital of the company (face value) shall not be more
than Rs. 25 crores.

2. Track Record
 The company should have track record of at-least 3 years.
 The company should have positive cash accruals i.e. operating profit
(earnings before depreciation and tax) from operations for at-least 2
financial years preceding the application and its net-worth should be
positive.

3. Other Requirements:
 The applicant Company has not been referred to Board for Industrial and
Financial Reconstruction (BIFR).
 No petition for winding up is admitted by a Court of competent jurisdiction
against the applicant Company.
 No material regulatory or disciplinary action by a stock exchange or
regulatory authority in the past three years against the applicant
company.

4. Disclosures:
The following matters should be disclosed 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. An auditor's certificate shall also be provided by the issuer to the
exchange, in this regard.
 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 litigation.
 In respect of the track record of the directors, the status of criminal cases
filed or nature of the investigation being undertaken with regard to 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 issuer have
or has been charge-sheeted with serious crimes like murder, rape, forgery,
economic offences etc.

COMPARISON OF LISTING AND COMPLIANCE NORMS OF

SME EXCHANGE WITH MAIN BOARD LISTING
S.N
Particular SME Main Board
.

Minimum Post Issue Paid Minimum Post Issue Paid up

1 Eligibility
up capital – Rs. 3 crores. capital – Rs. 10 crore

There must be a
There must be profit in last
distributable profits in 2
Track Record year and also a distributable
out of immediately
2 of Distribution profits in 3 out of
preceding 3 years, OR
Profits immediately preceding 5
Net worth shall be Rs. 5
years.
crores.

100% underwritten issues.

Merchant bankers are Not Mandatory (Under 50%
3 Underwriting required to underwrite compulsory subscription to
upto 15% on their own QIB’s)
account.

Merchant bankers are

Market required to undertake
4 Not Mandatory
Making market making for a period
of 3 years.

5 Time Line 3-4 Months 8-10 Months

SEBI approval is not SEBI approval for DRPH is a

Need For SEBI
6 required. preliminary condition for
Approval
IPO.
 IPO
7 Application Rs.1,00,000/- Rs.10,000 – Rs.15,000
Size

8 IPO Timeframe 3 to 4 months 6 months onwards

Reporting
9 Half yearly Quarterly
Requirements

Migration from BSE SME Exchange to the Main Board of

BSE:

1. It is mandatory for the company to be listed and traded on the BSE SME Platform
for a minimum period of two years.
2. Post issue capital should be more than Rs.10 crores and upto Rs.25 crores.
3. Shareholders’ approval to be sought by special resolution passed through postal
ballot – In postal ballot, the votes cast by shareholders other than promoters in
favour of the proposal to migrate to Main Board should be at least two times the
number of votes cast by shareholders other than promoter shareholders against
the proposal to migrate to Main Board.
4. To fulfill the eligibility criteria for migration to Main Board - The companies
seeking migration to Main Board of BSE should satisfy the eligibility criteria as
specified in 26 of SEBI (ICDR) Regulations, 2009 either at the time of initial listing
on SME platform or at the time of seeking migration to Main Board. However,
same will not be applicable where the company had sought listing on SME
platform by following the book building process and as per the requirements
prescribed in 26(2) of SEBI (ICDR) Regulations, 2009.