IPOPlatform Blogs

To be eligible for an Initial Public Offer (IPO) under NSE and BSE, companies must comply with SEBI ICDR Regulations (2018). This includes a minimum paid-up capital of Rs. 10 crores, average operating profits of Rs. 15 crores over three years, and net tangible assets of Rs. 3 crores. Additional conditions cover track record, investor grievance redressal, financial obligations, and offer for sale regulations. Companies must meet all criteria before applying for listing.

Unlisted and Pre-IPO shares offer investors a unique opportunity to acquire stakes in high-growth companies before they go public on NSE Emerge or BSE SME. These shares, traded via private placements, OTC markets, and investment platforms, often come at discounted valuations with high return potential. However, they involve liquidity, valuation, and regulatory risks. Investors should conduct thorough due diligence on financials, market position, and growth prospects before investing, ensuring informed decisions and strategic portfolio diversification.

January 2025 saw 43 companies filing DRHPs across BSE SME, NSE Emerge, and the Mainboard, with 29 IPO listings reflecting strong investor interest. Key upcoming IPOs include Amwill Health Care, Readymix Construction, and Chamunda Electricals. IPO advisors play a crucial role in guiding businesses through listing complexities. Platforms like IPOPlatform.com provide real-time updates, expert insights, and advisory services, helping investors and companies capitalize on IPO opportunities for maximum growth and returns.

SEBI’s Regulation 6(2) offers an alternative QIB Route for companies unable to meet mainboard profitability criteria. Under this, 75% of shares must be allocated to Qualified Institutional Buyers (QIBs) through a book-building process. Companies failing to qualify can explore SME exchanges like BSE SME or NSE Emerge, with guidance from IPO advisors and merchant bankers. This route enables emerging companies to raise capital, enhance visibility, and eventually transition to the mainboard.

Due diligence is a critical step for IPO preparation, ensuring compliance, financial stability, and transparency. It evaluates legal, financial, and operational aspects to mitigate risks and build investor confidence. Key stakeholders like merchant bankers, legal advisors, and auditors verify disclosures and regulatory compliance. The process identifies hidden liabilities, ensures accurate valuation, and aligns with IPO listing requirements—establishing a solid foundation for a successful public offering.

An IPO involves listing a company on stock exchanges like NSE Emerge or BSE SME by adhering to SEBI’s regulatory process. IPO pricing is done through the Book Building Method, which determines the price based on investor demand, or the Fixed Price Method, where the price is pre-set. Book building offers dynamic pricing, market-driven valuation, and transparency, while the fixed price method is simpler but lacks flexibility. Both methods impact investor confidence, share allocation, and post-IPO performance.

The Indian IPO market thrived in 2024, leading global charts with 326 listings, including 243 SME IPOs and 83 Mainboard IPOs, raising ₹1.8 Lakh Cr. Key highlights include record fundraises, robust listing gains, and strong sectoral diversification, with SME IPOs achieving ₹9,486 Cr. Regulatory reforms enhanced transparency and investor confidence. With 190 SME and 86 Mainboard DRHPs filed, 2025 promises continued growth, driven by innovation, sectoral expansion, and India’s economic resilience.

Investing in IPOs offers exciting opportunities but demands thorough analysis. Key considerations include a company’s fundamentals, industry positioning, valuation metrics, management expertise, and utilization of IPO proceeds. Retail investors should avoid market hype and rely on structured methodologies for informed decisions. Understanding risks, regulatory norms, and long-term growth potential is essential. Comprehensive research ensures better outcomes, helping investors align their strategies with the IPO’s true potential for success.

An Initial Public Offering (IPO) involves significant costs, including merchant banking fees, legal and regulatory expenses, audit charges, marketing, and underwriting costs. These expenses vary based on factors like IPO size, platform (SME or Mainboard), and market conditions. Effective planning, understanding fixed and variable costs, and coordination with intermediaries like underwriters, RTAs, and depositories are essential for a smooth IPO process, ensuring regulatory compliance and successful capital raising for business growth.

Fundraising is vital for startups and SMEs to fuel growth, maintain working capital, support R&D, and execute projects. Businesses can raise funds through equity financing (e.g., private equity, angel investors, IPOs) or debt financing (e.g., loans, bonds, NCDs). Each method has unique benefits and risks. With proper guidance from advisors, fundraising enables companies to scale, innovate, and stay competitive, while offering investors opportunities for high returns and market impact.

IPO advisors are essential in guiding companies through the complex journey of going public. They ensure IPO readiness by assessing financial health, compliance, and governance while optimizing valuation and selecting the right merchant banker. They facilitate pre-IPO funding, post-issue compliance, and ongoing investor relations. With expertise in market timing and regulatory frameworks, IPO advisors maximize the success of the IPO, build investor confidence, and position businesses for future fundraising and long-term growth.

IPO advisors play a pivotal role in guiding companies through the intricate process of going public by offering strategic planning, ensuring regulatory compliance, conducting due diligence, and preparing key documents like the DRHP. They provide expertise in IPO structuring, valuation, and market timing, helping businesses meet eligibility criteria and attract investors. Beyond the listing, they assist with post-IPO compliance and investor relations, ensuring long-term market success. By acting as intermediaries between the company and merchant bankers, IPO advisors streamline the process, optimize outcomes, and build trust with stakeholders, making them indispensable for a smooth and successful IPO journey.