Yes, Market Making is compulsory for 3 years post listing on SME platform.
Cost of raising funds through SME IPO ranges from 40-50 Lakhs depending on parameters like IPO size, services used etc. Sometimes it may be lower also as every IPO is different and cost varies depending on the IPO
Though, the technical requirement as per the eligibility criteria is that the company should have positive EBITDA. However, the company which has achieved a turnover level of 20 cr+ and PAT of around 1cr+ (however in case turnover is 30cr+, 3-4% PAT is feasible) of revenues has an advantage over others. A company with lower turnover or profitability cannot derive good valuations.
The company is required to have net tangible assets of Rs 3 cr as per the revised eligibility criteria of BSE SME platform.
The BRLM who has been appointed for the IPO usually raises the funds. Else the companies may arrange for investors themselves in their investor community.
The cost of underwriting varies between 3-10% depending on factors like size of IPO and other factors.
The company needs to establish a consistently growing trend in its profitability. A sudden rise in profits appears window dressed to the investors. Hence a trend needs to be established over some justified time period.
Yes, a proprietorship firm can bring the IPO on conversion to public limited company. One needs to go through the Revised Eligibility Criteria.
Yes, a partnership firm can bring the IPO on conversion to public limited company. One needs to go through the Revised Eligibility Criteria.
The firm will first be comverted in to a public limited company and that will be listed on the exchange. So, the listing happens at the Company level not the business level.
Usually SME IPO takes around 5-6 months.
Chittorgarh.com takes you through the entire IPO journey involving appointment of BRLMs, Legalities and Compliances, Due Diligence, Peer Review Audit, Appointment of Professionals and any other services that come within the scope of fundraising via IPO. The portal hand holds you for the entire IPO Journey.
Generally, for the purposes of SME IPO, the company is valued at P/E multiple.
No, the company with a track record of 3 years is eligible for raising IPO. See Revised Eligibility Criteria.
NSE and SME stock exchanges both have the SME IPO platform. The company can be listed on either of them.
Both are good SME platforms. However as per the past records it is seen that higher size IPOs are listed on NSE.
All IPO funds are credited to the company. An IPO can have two components i.e. Fresh Issue and an Offer for Sale. Fresh Issue proceeds are received by the company and offer for sale proceeds goes to investors who are making an exit from the company.
No, the funds when raised are credited to the company at the Issue price only. Any movement in the share price post listing is reflected at the Investor's end.
Market making is a facility which provides an eligible 2-way bid and ask quotes for the SME shares listed and traded on the SME exchange. Generally 1.25-1.50% of the IPO size is reserved for market making.
Mainboard IPO:
As per the eligibility criteria for IPO by SEBI, ICDR regulations do not give any threshold for either an upper limit or lower limit on the fund raise.
In the year 2024, Hyundai Motor India Limited raised Rs 27870.16 crores through mainboard IPO. In contrast in 2024, Vibhor Steel Tubes Limited raised Rs 72.17 crores through mainboard IPO.
To list on the NSE for a Mainboard IPO, a company must have ₹10 crore paid-up capital, ₹25 crore market capitalization, a 3-year track record, and comply with legal requirements, with no insolvency or debt defaults.
To list on the BSE, the company must have ₹10 crore paid-up capital, raise at least ₹10 crore in the IPO, and have a ₹25 crore market capitalization post-issue.
For more details, please refer to Link https://www.ipoplatform.com/blogs/difference-between-mainboard-and-sme-ipo/127
SME IPO
To list on NSE Emerge and BSE SME, a company’s post-issue capital should not exceed to Rs 25 crore a 3-year track record, and profit in 2 of the last 3 years. The company must have, ₹1 crore net worth, ₹3 crore net tangible assets, and at least 1 year of operating profit or a 3-year track record from its predecessor.
For details on NSE SME eligibility, refer to Link https://www.ipoplatform.com/blogs/nse-sme-eligibility-criteria/135
For details on BSE SME eligibility criteria, refer to link https://www.ipoplatform.com/blogs/bse-sme-eligibility-criteria/134
Eligibility criteria for SME IPO also does not have any threshold for either upper limit or lower limit on the fund raise.
In the year 2024, Danish power limited raise Rs 197.90 Crores through SME IPO on NSE Emerge. In contrast in 2023, Shoora Designs Limited raised Rs 2.03 crores through SME IPO on BSE SME.
For details on NSE SME eligibility, refer to Link https://www.ipoplatform.com/blogs/nse-sme-eligibility-criteria/135
For details on BSE SME eligibility criteria, refer to link https://www.ipoplatform.com/blogs/bse-sme-eligibility-criteria/134
Valuation of a company for an IPO depends on several factors, including:
IPO valuation whether its Mainboard or SME are determined on the basis of company’s performance, financial position etc.
Thus, it’s hard to say whether a Mainboard or SME IPO will get a better valuation, as it depends on above factors.
When a company raises funds through an IPO (Initial Public Offering), following things should be kept in mind;
The merchant banker must have to provide the details of utilization to SEBI.
IPO advisors or SME IPO Consultants play a crucial role in guiding the company through the IPO process. They assist with structuring the offering, preparing necessary documentation, IPO pricing with fair valuations, ensuring regulatory compliance, due diligence activity, and helping market the IPO to potential investors. Their expertise ensures a smooth and successful public listing.
IPO platform in India provides information on upcoming IPOs on NSE Emerge and BSE SME and list of merchant bankers and anchor investors. Role of IPO advisor is important in the success of the listings.
IPO Advisors like IPOPlatform.com assist with valuation, documentation, regulatory approvals, merchant banker selection, and investor outreach, ensuring smooth listing and successful fundraising. Their expertise helps companies navigate SEBI compliance, market positioning, and post-listing strategies.
Yes, LLPs, Partnership Firms and Sole proprietorships are eligible to convert into public companies and their track record is considered for IPO eligibility. However, after converting into company there will be cooling period of one full financial year from the conversion in BSE SME and there are no such criteria for NSE Emerge.
To execute an IPO in Mainboard it takes approximately from 8 to 12 months and SME IPO it takes approximately 4 to 6 months.
Pre IPO-Issue also has to comply with SEBI ICDR regulations.
A pre-IPO company might get eventually listed on NSE Emerge, BSE SME or mainboard platform of the stock exchanges by fulfilling the NSE/BSE eligibility criteria. Best Merchant Bankers in India have the role and responsibility for launching IPO.
For further details refer this link https://www.ipoplatform.com/blogs/what-is-pre-ipo-investment-and-role-of-ipo-advisors/142
The Price band for the IPO is set by the Issuer company in consultation with the Merchant banker before the IPO opens.
The Issue size of an IPO depends on various factors which includes
It also differs depending on the type of IPO, Mainboard IPO or SME IPO. Mainboard IPO generally have a larger issue size due to bigger operational scale and higher regulatory requirements, while SME IPOs are relatively smaller, catering to small and medium-sized businesses.
Issue Size Calculator is available on ipoplatform.com to estimate the Issue size.
Yes, Private investors can buy shares from promoters before the IPO which is known as Pre-IPO funding also known as private placement.
For further details refer this link https://www.ipoplatform.com/blogs/private-placement-of-shares-in-pre-ipo/141
The IPO process begins with the company’s decision to go public, followed by hiring key advisors such as IPO advisors, investment bankers, legal experts, and auditors. IPO advisors assist in finalizing the Best merchant banker in India. The lead manager carries out the IPO process and files DRHP.
Top 10 Merchant Bnakers in India
Once SEBI/Stock Exchanges approves the DRHP, the company sets the price band or fixed price for shares and conducts a roadshow to generate investor interest.
Know more about DRHPs in detail.
After the IPO opens for subscription, investors can apply for shares, and the allotment will be made on the demand. Finally, the company’s shares are listed on the stock exchange, marking its entry into the public market.
In SME IPO, minimum dilution requirement is 25% to outsiders and 1.25% for market makers. However, there is no upper limit on the dilution. It is regulatory compliances for market maker to hold 1.25% of the shares to maintain the liquidity in the stocks.
Yes, all securities held by promoters must be in dematerialized form. Learn more about Pomoters amd Promoter's Group here
The eligibility criteria for SME IPO states that the company must have positive FCFE for at least two out of the last three financial years for listing on NSE Emerge platform of India. Calculate your FCFE Ratio for SME IPO Eligibility.
The Price-to-Earnings (P/E) multiple helps investors evaluate whether an SME IPO is fairly priced by comparing its valuation to industry peers. A high P/E suggests growth potential but may indicate overvaluation, while a low P/E signals affordability or weaker earnings prospects.
The Price-to-Earnings (P/E) multiple helps investors evaluate whether an IPO is fairly priced by comparing its valuation to industry peers. A high P/E suggests growth potential but may indicate overvaluation, while a low P/E signals affordability or weaker earnings prospects.
The P/E ratio is calculated as:
P/E Ratio = Issue Price ÷ Earnings Per Share (EPS)
It measures how much investors are willing to pay for each rupee of earnings, helping assess IPO attractiveness compared to industry benchmarks and financial performance.
Understand Importance of PE ratio in Detail.
A good P/E ratio depends on industry standards and growth prospects. Generally, a lower P/E (5-15x) suggests affordability, while a higher P/E (20x+) may indicate growth potential but could also signal overvaluation, requiring further analysis.
The Price-to-Earnings (P/E) ratio is a valuation metric showing how much investors are willing to pay per rupee of earnings. It helps compare a company’s market price to its profits, guiding investment decisions in IPOs and stock market investments.
IPO valuation considers financial performance, P/E ratio, industry comparison, revenue growth, debt levels, and market demand. Other factors include management quality, economic conditions, and investor sentiment, influencing whether an IPO is attractively priced for potential investors.
The minimum SME IPO size is typically around ₹5-150 crore, while there’s no strict upper limit. However, most SME IPOs raise up to ₹ 200 crore based on business requirements, investor demand, and exchange regulations.
SEBI's minimum IPO size in India is generally ₹10 Crores, though not strictly mandated. The maximum IPO size is capped at five times the company's pre-IPO net worth, ensuring proportionality. Exchange listing requirements and profitability can further influence size. Consult IPOPlatform.com for expert IPO advisory services in India.
The size of an IPO depends on factors like company valuation, growth potential, industry trends, market conditions, and investor demand. Regulatory requirements and promoter holdings also impact the issue size.
IPO costs include regulatory fees, underwriting fees, legal & compliance expenses, marketing costs, and merchant banker charges. Typically, IPO expenses range from 5% to 10% of the total issue size.
The post-issue paid-up capital should not exceed Rs 25 crores.
The company must have at least 3 full financial years of track record of business to list on NSE Emerge or BSE SME stock exchanges of India.
Net worth is the sum of paid up capital and reserves and surplus appearing in the balance sheet of a company. The eligibility criteria require the net worth to be at least Rs 3 crores for SME IPO for NSE Emerge. BSE SME listing requirement states that the net worth shall be Rs 1 crore for preceding two full financial years.
The company must have operating profits or EBITDA of at least Rs 1 crore for two out of the last three financial years. There is no threshold for turnover though.
As per BSE SME IPO eligibility and listing requirements debt should not exceed three times the equity. Hence, leverage ratio shall not be more than 3:1
Dematerialization refers to conversion of physical shares into digital and electronic form. This is done by RTA (Registrars to IPO)
Entities or individuals debarred from accessing the capital market, wilful defaulters, fraudulent borrowers, or fugitive economic offenders are not eligible.
Yes, the company can apply to multiple exchanges but must select one as the designated stock exchange whether BSE SME or NSE Emerge.
A promoter is named in DRHP or RHP and one who exercises control over a company's operations.
No, institutions like banks or mutual funds are only promoters if they meet specific SEBI conditions beyond just owning 20% of shares.
The promoter’s family, related companies, and certain entities like subsidiaries or firms where the promoter or their family holds a significant stake.
The promoter is the founder of the company who exercises control over the company, while non promoters are the minority shareholders.
MPC requires promoters to hold at least 20% of the post-issue capital, with exceptions for certain investors.
Promoters must meet the MPC requirement at least one day before the IPO opens.
Excess promoter holdings above the minimum requirement are released in two stages:
Intermediaries are the most important part of an IPO process. Lead managers, IPO Advisors, Registrar (RTA) to the Issue, Compliance Officer (Company Secretary) are the financial intermediaries in IPO Process.
Major merchant bankers in India for SME IPO includes Hem Securities, GYR Capital Advisors, Holani Consultants and others. Mainboard Merchant Bankers includes SBI Capital Markets, Kotak Mahindra Capital and ICICI Securities
The lead manager in charge of underwriting must fulfill underwriting obligations and notify underwriters of their responsibilities as per regulations.
The company issuing securities appoints the Registrar, often recommended by investment banks or underwriters.
Investors can contact the Registrar directly for assistance with allotment status, refund issues, or Demat account transfers
A listed company must comply with SEBI’s Listing Obligations and Disclosure Requirements (LODR) and it is usually handled by the in-house qualified Company Secretary as the Compliance Officer.
Due Diligence is an important part of IPO process. Due Diligence means investigating and verifying a company’s information to ensure compliance with laws and regulations, especially during business transactions like IPOs, mergers, or investments.
Experts like auditors, legal advisors, Merchant Bankers, and IPO advisors work together to navigate the process.
It usually takes 1 to 1.5 months, depending on the complexity of the business.
Adverse findings can delay the IPO process, but timely resolutions can get the process back on track.
A Peer Review Audit is an independent evaluation of an audit process done by firms (Practising firm) to ensure compliance with professional standards. In IPO, peer review audit is a mandatory compliance.
The Restated financial statements for the last three years and any stub period must be reviewed by a peer auditor for IPO listing requirements.
The Peer Review Audit ensures the accuracy, reliability, and regulatory compliance of the company’s financial statements for inclusion in the IPO offer document known as DRHP.
Only Chartered Accountants with at least 10 years of practice experience and valid certification from the ICAI Peer Review Board can perform Peer Review Audits. They are called Peer Review Auditors.
An adverse opinion must be reported, and the company must address the issues; a follow-up review may take 1-3 months to resolve concerns.
For small companies, it may take 2-4 weeks, while larger companies may take 2-3 months, depending on the complexity of the business.
DRHP is a preliminary document filed by a company planning to launch an IPO. It provides important details about the company’s business, financials, and risks before the IPO is approved.
It takes a minimum 3 months for an IPO to open after filing of DRHP. The relevant stock exchanges take time to examine and approve the DRHP.
DRHPs are available on SEBI’s official website, as well as the websites of the stock exchanges (NSE, BSE) and the company’s lead managers. One may also refer ipoplatform.com for a particular company’s DRHP.
DRHP is a preliminary document whereas RHP is a final version which contains all disclosures and comments as addressed at the time of review of DRHP.
The price band is the range within which investors can bid for shares during the book-building process. The price band must be announced at least two working days before the IPO opens, or earlier in pre-issue advertisements.
The IPO price is set based on demand, market conditions, and financial metrics like EPS and P/E ratio, in consultation with the merchant banker.
In a fixed price issue, the price is pre-decided, while in a book-built issue, the final price is determined through investor bidding.
IPO GMP (Grey market premium) is the price an investor is willing to pay above the IPO offer price in IPO Grey market. To be noted that GMP is used in unregulated markets and can be risky.
Differential pricing allows different prices for different investor categories, such as discounts for retail investors and employees.
RHP is the final IPO document filed with SEBI and the Registrar of Companies (ROC) before IPO opens.
UDRHP is a revised version of the Draft Red Herring Prospectus (DRHP) that includes all changes that are required by the stock exchange on examination of DRHP.
They ensure that all disclosures and changed suggested by the stock exchange are duly incorporated and provide investors with accurate and updated information regarding SME IPO.
RHP is typically filed 3-5 days before the IPO opens.
IPO price shall be announced at least two working days before the IPO opens in pre-issue advertisement for IPO.
Only after at least 90% of the offer is subscribed and verified by the lead manager (Merchant Banker) and RTA.
Shares are credited to investors Demat accounts, and any IPO refunds/unblocking of funds are done electronically.
The Registrar to the Issue (RTA) handles share allotment and refunds after the IPO closes.
Refunds for non- allotment of IPO are generally processed within 24-48 hours for ASBA applications after the IPO closes.
An Initial Public Offer (IPO) is when a company sells its shares to the public for the first time to raise funds. This happens in the primary market and is one of the main ways a company can get long-term funds. An IPO helps a company grow by giving it access to money from public investors. It also boosts the company’s image and brings more attention to its brand. For many businesses, going public is the best way to raise funds quickly for expansion. On a bigger scale, when many IPOs are happening, it often shows that the stock market and economy are doing well.
Understand IPO process and Eligibility
A SME IPO is an IPO issued by a Small and Medium Enterprise on a stock exchange’s SME platform. These platforms, NSE Emerge or BSE SME, are tailored for small companies looking to raise funds with fewer compliance obligations than the Mainboard. SME IPOs require a minimum post-issue capital of Rs. 1 crore and up to Rs. 25 crores. SME benefit by getting capital for business expansion and gaining visibility. Investors get a chance to invest in early-stage growth businesses. However, SME IPO may have higher risk compared to Mainboard IPOs due to limited track record and liquidity.
Mainboard IPOs are launched by larger companies and listed on the primary stock exchanges like NSE and BSE. They must meet stricter eligibility norms, such as a minimum post-issue capital of Rs. 10 crores and profitability track record. In contrast, SME IPOs cater to smaller businesses with less compliances. SME IPOs are listed on dedicated platforms like NSE Emerge or BSE SME. Investors should consider liquidity, company fundamentals, and compliance standards when investing. Mainboard IPOs offer more liquidity and are suitable for a wider range of investors, including large institutions.
To be eligible for a SME IPO, a company must:
Merchant bankers assist companies in meeting these conditions and filing with SEBI and exchanges.
To be eligible for a Mainboard IPO, a company must meet the following key requirements:
Yes, ipoplatform.com and other IPO advisory tools offer an "Issue Size Calculator". The IPO issue size can be calculated based on three key parameters: the company’s Profit After Tax (PAT) for the current financial year, the Price-to-Earnings (PE) multiple, and the percentage of equity dilution. The PE multiple reflects how much investors are willing to pay for each rupee of the company’s earnings. Dilution percentage indicates the share of the company being offered to the public.
IPO pricing is a key IPO process that involves detailed analysis by the company and merchant bankers in India. It is based on various factors such as the company’s financial performance, future growth prospects, industry comparisons and current market trends. There are typically two methods used for IPO pricing in IPO: Fixed Price and Book Building. In a Fixed price Issue, the price is decided and disclosed in advance. In book building, a price band is provided, and investors bid within that range. The final price is determined after evaluating investor demand. Valuation techniques, like comparing with peer companies or calculating based on earnings, also influence the pricing. This ensures a fair price that balances company value and investor interest. List of Upcoming Mainboard IPO
SME IPOs offer the potential for high returns but also carry significant risks like low liquidity, business concentration, limited track record, and market volatility. Post-listing, price discovery can be sharp, and exit options may be limited. Investors should thoroughly analyze the DRHP, management, competitive positioning, and financials. SME IPOs are suitable for investors with higher risk tolerance and long-term investment horizon. List of Upcoming SME IPO
Qualified Institutional Buyers (QIB) can invest in QIP. These include mutual funds, foreign portfolio investors (FPIs), insurance companies, banks, pension funds, and SEBI-registered alternative investment funds (AIFs).
QIP fundraising is significantly faster than an IPO (Initial Public Offering) or FPO. Listed companies can typically complete a QIP within 2–6 weeks, from Board approval to allotment. It is an attractive post-listing fundraising option for companies seeking quick access to institutional capital for growth initiatives. Role of IPO Consultants in IPO
Qualified Institutional Placement (QIP) is a method for listed companies to raise capital by offering shares to Qualified Institutional Buyers (QIBs). Benefits of QIP include: faster process, fewer compliance steps, and inclusion of experienced institutional investors for post-listing funding needs.
Rules governing QIP:
QIP (Qualified Institutional Placement) is a fundraising route available to listed companies. It involves raising funds from the QIBs through private placement. The benefits of QIP are as follows:
There is a Lock-in period of 1 year for investors in QIP from the date of allotment. This includes transparency and upholds market integrity. Also, to be noted that shares allotted in QIP cannot be sold to the promoters and promoter Group for 1 year from the date of allotment.
SEBI mandates a Minimum promoter contribution in IPO to build investor confidence by aligning the promoter’s interest with that of public shareholders
QIP price is calculated as per the SEBI formula for determining the floor price in a Qualified Institutional Placement (QIP). The floor price is based on the average of weekly high and low of closing prices of the company's shares on the stock exchange during the two weeks preceding the "relevant date".
The relevant date refers to the date on which the company's Board or a duly authorized committee decides to open the QIP.
Following points should be noted related to QIP pricing:
Use our IPO Issue size calculator on ipoplatform.com to calculate Issue size of the IPO. Issue Size Calculator for IPO
While QIPs are a quick and flexible way to raise funds, they also come with certain disadvantages. Companies and investors should be aware of these potential challenges. Disadvantages are as follows:
Only a listed company can bring QIP- Benefits of IPO
In Qualified Institutional Placement, only QIB (Qualified Institutional Buyers) are allowed to invest, as per SEBI ICDR Regulations, 2018. They include entities such as, Mutual funds, Insurance companies, Foreign Portfolio Investors, Banks, Financial Institutions, Pension funds, Venture Capital funds, Alternative Investment funds.
QIBs are large, financially sophisticated investors who have expertise and the resources to evaluate and participate in the QIP. They include entities such as, Mutual funds, Insurance companies, Foreign Portfolio Investors, Banks, Financial Institutions, Pension funds, Venture Capital funds, Alternative Investment funds. Individual investors are not permitted to invest in QIPs. This restriction ensure that the issue is subscribed by the professional investors who understands the risks associated with the Issue and can make informed investment decisions.
QIP shares can only be purchased by QIB investors such as mutual funds, banks, insurance companies, and pension funds. The shares are offered through private placement process.
SEBI approval is not required for the QIP fund raise. As per SEBI regulations, companies are only required to comply with the eligibility norms, disclosure requirements, and guidelines for QIP. They must file the Placement Document with the stock exchanges. This is one of the main reasons QIPs are faster and simpler compared to traditional public offerings. The absence of a lengthy approval stage allows companies to raise capital quickly while still operating within SEBI’s regulatory framework.
For details of IPO in India visit:- https://www.ipoplatform.com/
A Qualified Institutional Placement (QIP) follows a structured process to ensure transparency and compliance with SEBI rules. QIP Process is as follows:
When a company wants to raise funds through QIP, it must meet certain eligibility criteria set by SEBI.
NSE SME Emerge has recently introduced additional eligibility criteria for IPO and listing in the existing IPO eligibility criteria. Free Cash Flow to Equity (FCFE) is the amount of cash that a company generates that is available to be distributed to its equity shareholders. It represents the money left after paying all the expenses, taxes, interest, and necessary investment in assets, while also considering any new borrowings and debt obligations. This key financial metric helps assess how effectively a company utilizes its equity capital.
Free cash flow to Equity calculation is done to compute cash available with a company that would remain for the shareholders once operating expenses, net fund flow from investing and net fund flow from finance-related activities have been accounted for. Hence, this free cash flow is attributable to shareholders, which includes any excess cash and excludes all debt and financial obligations.
FCFE = Net Cash flow from operations – Purchase of Fixed assets + Net Borrowings – (Interest*(1-T))
Free Cash Flow to Equity is used when investors want to know how much cash a company can return to its shareholders after meeting all the expenses, debt repayment, and reinvestment needs.
It is especially used in these cases:
FCFE and FCFF are both cash flow measures, but they are used for different purposes.
Positive FCFE signifies have surplus cash after paying its expenses, taxes, debts and investments which can be distributed among shareholders as dividend or reinvested in business.
Negative FCFE means the company is consuming more cash than it generates and does not have enough cash to cover these items (maybe due to losses, high CapEx, or repayments).
NSE SME Emerge has introduced additional eligibility criteria recently in addition to other criteria. Companies wanting to launch SME IPO must show positive FCFE in at least 2 out of 3 financial years immediately before filing the DRHP. The aim of this rule is to ensure that only financially sound companies with ability to generate real cash flow are allowed to raise funds through the Initial Public Offer on NSE SME platform.
By linking eligibility to FCFE, National Stock Exchange ensures greater transparency and protects investors by admitting only those companies that demonstrate sustainable financial growth.
FCFE (Free Cash Flow to Equity) calculator helps to estimate cash available to company’s shareholders after providing for expenses, taxes, debts and investments. This tool helps analysts, investors to assess a company’s financial strength and make informed financial decisions.
This tool makes it easier for investors and analysts to assess a company’s financial strength, especially during IPO evaluations, and supports better-informed investment decisions. FCFE calculator is available at IPOPlatform.com which provides a reliable and accurate calculation that helps users estimate the free cash available to equity shareholders after meeting all expenses, debt obligations, and reinvestments.
The requirement of FCFE (Free cash flow to equity) is mandatory on NSE Emerge. However, it should be noted that it FCFE criteria for Initial Public Offer is not there on BSE (Bombay Stock Exchange) SME.
Free cash flow to Equity calculation measures the cash available with a company that would remain for the shareholders once operating expenses, net fund flow from investing and net fund flow from finance-related activities have been accounted for.
FCFE = Net Cash flow from operations – Purchase of Fixed assets + Net Borrowings – (Interest*(1-T))
Learn about IPO and Listing, SEBI ICDR Regulations in SME e-book
Know about SME IPO Eligibility criteria in India.
Upcoming Mainboard IPO in India
Initial Public Offering- What is it and how to become public
The International Financial Services Centre (IFSC) at GIFT City was created to build a world-class financial hub in India—one that can stand alongside top global cities like Singapore, Dubai, London, and New York. It’s set up within a Special Economic Zone (SEZ) to allow international financial transactions to happen right from India, in foreign currencies.
GIFT IFSC offers several big advantages:
It also provides helpful features like:
In short, GIFT IFSC makes it easier for foreign companies to invest in India and for Indian businesses to work globally. The goal is to keep international financial transactions within India, attract global investors, and turn India into a major player in the world’s financial markets.
In August 2024, the International Financial Services Centres Authority (IFSCA) introduced the IFSCA (Listing) Regulations, 2024, which provide a single rulebook for listing securities at India’s IFSCs, including GIFT City.
These rules allow both Indian and foreign companies to list a wide range of financial products, like:
SEBI ICDR Regulations for SME IPO
For Companies Listing Shares, the company should have:
Other Listing conditions on IFSC
For Companies Listing Debt Instruments, the company should have:
An International Financial Services Centre (IFSC) is a special zone in India designed to handle international financial transactions, like those usually done in global hubs such as Singapore, Dubai, or London. The idea is to bring these kinds of high-level financial activities back to Indian soil instead of letting them happen abroad.
India's first IFSC is in GIFT City, Gujarat. It provides a supportive environment with favourable tax rules and relaxed regulations, making it easier and more attractive for global businesses to operate here.
In simple terms, the IFSC helps:
By connecting with global financial systems, the IFSC makes India a more competitive and important player in the world of international finance, all while boosting the economy and reducing our reliance on foreign financial centres.
Banks are allowed to operate in an International Financial Services Centre (IFSC), such as the one in GIFT City, Gujarat. Banking is one of the main services offered there. After getting approval from the IFSCA (the authority that regulates IFSCs), both Indian and foreign banks or even Indian branches of foreign banks can set up special branches called IFSC Banking Units (IBUs).
These banks don’t deal in Indian Rupees for regular transactions, but they can offer many international services in foreign currencies, such as:
Why do banks choose to operate in an IFSC?
This setup enables global banks to easily enter the Indian market, helps Indian banks expand their global reach, and encourages more international business to flow through India.
Launched in 2022, the IFSCA FinTech Incentive Scheme is designed to turn GIFT City into a global hub for financial technology (fintech) innovation. The scheme offers financial support (grants) to both Indian and international fintech startups to help them build and scale advanced financial solutions.
What kind of grants are offered?
Depending on the stage and type of project, eligible startups can receive grants such as:
Who can apply?
The Grants are released in phases, depending on milestones achieved—like completing an MVP or entering the sandbox for testing.
Other important points:
The Direct listing scheme of GIFT IFSC has enabled the start-ups and SMEs to list on the recognised stock exchanges, i.e., India International Exchange (India INX) and NSE INX in IFSC. This would encourage start-ups (including Fintech companies) to list in IFSC and would be a step towards developing IFSC as a hub for Fintech companies.
1. FEMA (NDI) Amendment Rules, 2024 (effective January 24, 2024)
Issuance pricing:
2. Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024 (effective January 24, 2024)
What are a book build IPO and Fixed Issue type?
Eligible Entities
Ineligible Companies
Listing on IFSC exchanges allows companies to tap into a vast pool of international investors, including specialised investors with industry-specific interests, beyond the domestic market.
The increased investor base and global visibility can lead to better price discovery and potentially higher valuations for the company's shares compared to domestic listings alone.
Companies can raise capital in foreign currencies, diversifying their funding options and reducing reliance on domestic markets.
Listing on reputable international exchanges enhances a company's global presence and positions it as a global player, facilitating international expansion.
The IFSCA has introduced regulations aimed at promoting ease of doing business for issuers, including a streamlined listing process and a business-friendly regulatory environment.
The IFSCA framework provides tax benefits and incentives for companies listing and operating within the IFSC, further enhancing its attractiveness as a capital-raising hub.
Transactions on IFSC exchanges are conducted in foreign currency, eliminating currency risk for international investors.
Listing in GIFT IFSC can serve as a gateway for Indian companies to access global opportunities and expand their international presence.
A market maker is a person or a registered entity (like a broker or trading member of a stock exchange) approved by SEBI and the stock exchange. Their main role is to keep trading active by always being ready to buy (bid) and sell (ask) certain shares during market hours. This ensures that investors can easily trade, prices don’t fluctuate too sharply, and small shareholders' interests are protected. Some prominent market makers are Hem Finlease Private Limited, Pantomath Stock Brokers Private Limited, Choice Equity Broking Private Limited, NNM Securities Private Limited, etc.
To be eligible for a SME IPO, a company must:
To be eligible for a Mainboard IPO, a company must meet the following key requirements:
The Issue size of an IPO depends on various factors which includes
It also differs depending on the type of IPO, Mainboard IPO or SME IPO. Mainboard IPO generally have a larger issue size due to bigger operational scale and higher regulatory requirements, while SME IPOs are relatively smaller, catering to small and medium-sized businesses.
Issue Size Calculator is available on ipoplatform.com to estimate the Issue size.
Yes, ipoplatform.com and other IPO advisory tools offer an "Issue Size Calculator". The IPO issue size can be calculated based on three key parameters: the company’s Profit After Tax (PAT) for the current financial year, the Price-to-Earnings (PE) multiple, and the percentage of equity dilution. The PE multiple reflects how much investors are willing to pay for each rupee of the company’s earnings. Dilution percentage indicates the share of the company being offered to the public.
IPO pricing is a key IPO process that involves detailed analysis by the company and merchant bankers in India. It is based on various factors such as the company’s financial performance, future growth prospects, industry comparisons and current market trends. There are typically two methods used for IPO pricing in IPO: Fixed Price and Book Building. In a Fixed price Issue, the price is decided and disclosed in advance. In book building, a price band is provided, and investors bid within that range. The final price is determined after evaluating investor demand. Valuation techniques, like comparing with peer companies or calculating based on earnings, also influence the pricing. This ensures a fair price that balances company value and investor interest. List of Upcoming Mainboard IPO
SME IPOs offer the potential for high returns but also carry significant risks like low liquidity, business concentration, limited track record, and market volatility. Post-listing, price discovery can be sharp, and exit options may be limited. Investors should thoroughly analyze the DRHP, management, competitive positioning, and financials. SME IPOs are suitable for investors with higher risk tolerance and long-term investment horizon. List of Upcoming SME IPO
In an IPO, Issue size means the total amount of money a company wants to raise by offering its shares to the public. It is calculated by multiplying the total number of shares offered with the price at which each share are being sold (called the offer price). For example, if a company offers 10 lakh shares at Rs. 100 each, the issue size would be Rs. 10 crores. The issue size helps investors understand the scale of the IPO and how much funding the company is targeting. It can be expressed as either the number of shares or the total value in rupees. A larger Issue size often indicates a more established company, while smaller ones are common for SME IPOs.
The Issue Size is determined on the basis of IPO Valuations which determine the number of shares to be issued to the public and IPO price at which it is offered. Book Running Lead Manager (BRLM) along with IPO Advisors and IPO consultants are responsible for determining the Issue size based on above parameters.
Yes, the Issue size varies based on the type of IPO. SME IPOs (for smaller companies) generally have a smaller issue size, starting from Rs. 10 crore or even lower. In contrast, Mainboard IPOs (for larger companies) often have a much bigger issue size. Regulatory requirements and eligibility criteria also vary between SME IPO and Mainboard IPOs. However, there is no upper or lower limit for the Issue size in SME IPO or Mainboard IPO.
Mainboard IPOs are generally large-sized IPOs, though there is no lower or upper limit specified by SEBI. Larger and established companies usually go for Mainboard IPO. List of Mainboard IPO
As observed in October 2024, the Mainboard IPO of Hyundai Motor India Limited was launched with an Issue size of Rs. 27870.16 crores.
One of the most important elements in determining the Issue size is the valuation of the company, which is often derived using the Price-to-Earnings (P/E) multiple based on industry standards and the company’s own financials.
The company works closely with its Merchant Banker and IPO Advisors for guidance on an appropriate and marketable Issue size. They also ensure compliance with SEBI norms
Yes, a company can change the Issue Size after filing the Draft Red Herring Prospectus (DRHP). However, if the company decides to revise the issue size beyond the permitted limit, it is required to refile the DRHP with SEBI or the stock exchanges, as the case may be. This ensures that all stakeholders have the access to updated information and the changes are reviewed by the appropriate authorities before proceeding with the IPO.
Fresh Issue Size refers to the portion of the Issue size where the company issues fresh or new shares to the public to raise capital. The funds received from this part of the IPO goes directly to the company and is typically used for business expansion, working capital, debt repayment, or other corporate purposes mentioned in the Objectives of Issue in Draft Red Herring Prospectus.
OFS, or Offer for Sale in IPO, is a method of selling shares in a company that is listed on a stock exchange. This method is used by promoters, major shareholders, or the company itself to sell their shares to the public. It is a mechanism introduced by SEBI (Securities and Exchange Board of India) that allows promoters and existing shareholders of a company to sell their shares through the stock exchange platform to the public.
SEBI does not fix a specific minimum or maximum limit for the Issue size in IPO. So, while SEBI doesn’t directly restrict the Issue size, IPO Eligibility criteria ensures that companies follow the right process and thus protect investors.
When a company lists its shares through IPO, it not only raises funds but also strengthen its public profile and market recognition. IPOs helps founder or early investors with an exit route, increase share liquidity, provide market driven valuation. Check BSE SME IPO eligibility
Market makers play a crucial role in financial markets. These are the intermediaries who provide liquidity in the securities that are not highly traded on the stock exchange. This financial intermediary offers bids for the smooth flow of transactions between buyers and sellers. The Securities Exchange Board of India has mandated the appointment of market makers in case of SME IPO to maintain the liquidity in the listed securities of at least 75% for a minimum period of 3 years. However, for Mainboard IPO, the appointment of Market makers is voluntary and not compulsory by SEBI.
Some key importance of Market Makers is:
• Liquidity – Keep markets flowing smoothly.
• Transactions – Enable continuous buying & selling.
• Accessibility – Allow investors to trade anytime.
• Price Discovery – Ensure fair & efficient pricing.
• Stability – Provide consistency & market balance.
• Confidence – Build trust and attract investment.
Yes, Market Makers take high risk as market making involves trading in securities. The main risks faced by the market makers are:
• Inventory Risk – Since they hold securities to provide liquidity, price fluctuations can cause losses.
• Adverse Selection Risk – They may trade against more informed investors, leading to unfavourable trades.
• Liquidity & Volatility Risk – In illiquid or highly volatile markets, spreads may not cover potential losses.
Market Makers manage these risks by using strategies like hedging, adjusting spreads, and relying on algorithms.
New IPO
The purpose of market makers in a financial market is to keep up the functionality of the market by infusing liquidity. In the absence of market makers, an investor who wishes to sell securities will not be able to unwind their positions. It is because the market doesn’t always have readily available buyers.
Each market maker displays buy and sell quotations (two-sided markets) for a guaranteed number of shares. Once the market maker receives an order from a buyer, they immediately sell their position of shares from their inventory. This allows them to complete the order.
A market maker must commit to continuously quoting prices at which it will buy (or bid for) and sell (or ask for) securities. Market makers must also quote the volume in which they're willing to trade, along with the frequency of time they will quote at the best bid and best offer prices.
Market makers primarily generate income through the bid–ask spread, the difference between the prices at which they buy (bid) and sell (ask) securities. By purchasing at the bid price and selling at the ask price, they earn small margin on each trade. Even minimal spreads can result in substantial earnings for large trading volumes.
Merchant Bankers in India
Illustration: If a market maker quotes ₹100 as the bid and ₹100.10 as the ask, completing trades at both prices yields a profit of ₹0.10 per unit. Although the margin is narrow, the sheer frequency and volume of transactions enable meaningful accumulation of income over time.
In addition to spreads, stock exchanges may provide incentives to market makers to ensure liquidity, especially in less actively traded securities. These incentives are typically linked to meeting specific conditions, such as maintaining defined spread thresholds and committing to continuous quoting during market hours.
That said, profitability is not without risk. Market makers carry exposure by holding securities in volatile markets, where sudden price fluctuations may lead to losses.
Market makers provide liquidity by always being ready to buy and sell shares. They quote two prices – one at which they will buy (bid) and another at which they will sell (ask). By providing these kinds of services, Market Makers provide liquidity; they have to keep a minimum amount of inventory of the securities for which they are appointed by the Company.
Understand the cost of bringing IPO
This way, investors can quickly find someone to trade with, ensuring smooth transactions, less waiting time, and stable prices in the market. Market Makers do this by buying shares when fewer people want them and selling when many want to buy, while using advanced trading strategies and algorithms to manage risk and earn from the difference between the buying (bid) and selling (ask) price.
Becoming a market maker requires strong financial knowledge, risk management skills, and advanced trading systems. The key steps include:
Role of Market Maker in Initial Public Offer
1. Build Financial Expertise: Develop a solid understanding of finance, trading strategies, and market structures. Academic backgrounds in finance, economics, or quantitative fields are highly valuable.
2. Obtain Regulatory Licenses: Market makers must be licensed to operate. In India, registration with SEBI is required.
3. Set Up Trading Infrastructure: Establish robust trading systems with high-speed internet, advanced platforms, and low-latency order execution capabilities to remain competitive.
4. Ensure Adequate Capital: Since market making requires holding large volumes of securities, sufficient capital is essential to manage market fluctuations and liquidity needs.
5. Adopt Risk Management Practices: Implement effective risk and hedging strategies to manage inventory exposure and reduce potential losses.
Yes, market making is legal in India. The Securities Exchange Board of India has mandated the appointment of market makers in case of SME IPO for providing liquidity once they are listed on the stock exchange for a minimum period of 3 years from the date on which the company securities are listed on the exchange.
|
Market Type |
Legal & Regulated? |
Governing Framework |
|
Equities (on SEBI-regulated exchanges) |
Yes |
SEBI-issued guidelines since 1993, with approval and compliance obligations |
| Cryptocurrencies |
Not regulated |
No specific market-making laws exist |
Yes, individuals can become market makers in India, but there are some conditions:
• A person cannot just start acting as a market maker directly.
• They must be registered with SEBI (through a stock exchange) as a trading member or broker.
• Once approved, they are required to follow SEBI and exchange guidelines, like:
• providing continuous two-way quotes (buy & sell),
• maintaining minimum inventory in the stock,
• and following reporting/compliance requirements.
IPO Advisors for IPO Readiness
So, in practice, market makers are usually brokerage firms or trading members of stock exchanges. An individual can become one only if they are registered as such with SEBI/exchange, not as a casual investor.
Not always, Market makers earn mainly from the bid–ask spread (buying slightly cheaper and selling slightly higher). But they also face risks that can reduce or even wipe out profits:
• Price Volatility: If the stock price suddenly moves against their position, they may incur losses.
• Inventory Risk: Holding too much of a stock that isn’t selling can lock up their capital.
• Low Trading Volume: If there’s not enough demand, the spread earnings may not cover costs.
• Competition: More market makers lead to tighter spreads, which can lower profits.
• Regulatory Costs & Compliance: Meeting SEBI and exchange obligations also adds to expenses.
So, while market makers are designed to earn steady profits in the long run, they are not always profitable—especially during volatile or low-liquidity periods.
Anchor Investors in IPO
No, market makers and brokers are two different terms and the intermediaries of the SEBI, which can be one person or firm, but they both have different roles and responsibilities to be fulfilled.
| Aspect | Market Maker | Broker |
| Role | Provides liquidity by offering bid/ask prices | Facilitates transactions between buyers and sellers |
| Profit Sources | Earns from the bid-ask spread | Earn commissions and fees from trades |
| Risk Exposure | Holds inventory of securities | No direct market risk |
| Order Execution | Fills client orders internally | Routes orders to exchanges or other brokers |
• SEBI regulations require them to provide fair and continuous two-way quotes (buy & sell) to ensure liquidity, not to move prices artificially.
• Any attempt to rig prices, create false demand/supply, or mislead investors is considered market manipulation, which is strictly prohibited and punishable under SEBI laws.
• Stock exchanges also monitor their activities closely to prevent abuse.
IPO Performance Tracker
However, in practice, if a market maker misuses their position by quoting unfair prices or coordinating trades, it can distort prices, but this is illegal and subject to heavy penalties.
No, it is not mandatory to appoint the market makers in every market and for every security of the companies. These market makers are appointed for the securities and for those companies that have or may have less trading or liquidity. Market Makers are mostly seen in:
• SME (Small & Medium Enterprises) platforms of stock exchanges (like NSE Emerge, BSE SME). Check IPO Eligibility
• Certain illiquid stocks where exchanges appoint them to maintain liquidity.
• In main board markets (large, frequently traded stocks), market makers are usually not required because there’s already enough natural liquidity from investors and institutions.
• In other asset classes (like derivatives, commodities), some products have market makers, while others rely purely on supply and demand.
So, market makers are appointed only where needed, mainly in illiquid or new markets, not in every stock or exchange segment.
Some of the Prominent market makers are Hem Finlease Private Limited, Pantomath Stock Brokers Private Limited, Choice Equity Broking Private Limited, NNM Securities Private Limited, etc. Market Maker help companies in maintaining Liquidity in the market by trading shares to buy and sell.
Market Makers were introduced by SEBI to protect the interest of retail investors and to foster liquidity specially in SME segment. Without the presence of market makers, an investor who wants to sell their securities will not be able to execute their order. It is because the market doesn’t always have readily available buyers.
It is a process where the company offers a price range, and investors place their bids within that range. The final price for book built Issue type is decided based on the bids received from various investors.
It helps in a fair price discovery based on the investor demand and market conditions.
In the book building method, Issuer companies can revise or change the price range before the IPO closes. Check SEBI Regulations for Price band in ipoplatform SME e-book
There are two IPO methods: Fixed Price IPO and Book Building IPO. In Book building Issue, price is determined on the basis of the bids received by the investors and interest shown in an IPO. The IPO price is predetermined in the case of Fixed price IPO. A book building issue might attract more subscriptions, so most companies may prefer Book Building Issue.
The share price is decided in advance by the company before the IPO (current IPO dashboard) opens in Fixed Price method.
The Investors can apply at a fixed price declared by the company before the IPO opens.
The company in consultation with the merchant banker (list of merchant banker in India) decides the price of the share which is based on various factors like market conditions, market trends, financial performance and growth plans of the company.
In Fixed Price Issue, Issuer company decides the fixed price in consultation with the merchant banker before the IPO opens. In Book building Issue, the Issuer company provides a price range to the investors (for example Rs. 110 – 120). Investors can place their bids at any price between the given price range. In this method, the price is decided after the bidding period is over. Upcoming IPO by Issue Type
The best and easiest way to bid for an IPO is either from UPI or form ASBA through Broker’s app or website/net banking. It is very quick and it can be tracked easily just by entering the details required. IPO Application
An anchor investor is a large, institutional investor—such as a mutual fund, bank, insurance company, or pension fund—that commits significant capital to buy shares in Mainboard IPO or an SME IPO before public trading begins. By investing early and in substantial amounts, anchor investors provide credibility, boost demand, and establish a fair price for the newly listed stock.
Their involvement signals confidence in the company's prospects, thus attracting retail and other smaller investors to participate. The Anchor investors are offered shares at a specified price before the IPO opens for investors. Anchor investors have to hold their shares for a fixed period and can sell 50% of their shares after 30 days from listing and the other 50% after 90 days. For list of upcoming view Mainboard IPOs.
An anchor in investing usually refers to an anchor investor in IPOs. These are large institutional investors, like mutual funds, foreign portfolio investors (FPIs), or insurance companies, who invest in a company’s shares just before the IPO opens to the public. The role of an anchor is to create demand and bring stability in the IPO process. They do not get discounts but receive assured allotment at the IPO price. To see the list of merchant bankers visit IPOplatform.com.
|
Feature |
QIB |
Anchor Investor |
|
Definition |
Large institutions registered with SEBI invest during the application process of Initial Public Offer. |
Qualified institutional buyers (QIBs) registered with SEBI and invests before the opening of the IPO. |
|
Timing |
They invest between the opening and closing date of the IPO. |
These investors invest one day before the opening of the IPO. |
|
Allotment |
QIBs are allotted shares at the time of IPO. |
The anchor investors are allotted shares at IPO Price before the IPO. |
|
Lock-in period |
No lock-in period. |
|
|
Role in IPO |
Provides bulk investment at the time of the IPO |
Ensures the credibility and stability of an IPO. |
To check eligibility criteria for SME IPOs on IPOplatform.com
You can check the list on the NSE and BSE sites issued by the company before the opening of the IPO application process. The list includes all the anchor investors that have participated in the process and the number of shares allotted to them. The List of Anchor investors can be checked from business sites and information providers like chittorgarh.com, IPOplatform.com. The snippet below shows the list of anchor investors for Sattva Engineering on the IPO information section of the IPOplatform.com site.
• When applying for an IPO in India, investors can choose from different categories such as Retail Individual Investor (RII), High Net-worth Individual (HNI/NII), Qualified Institutional Buyer (QIB), and Anchor Investor.
• The retail category (Individual investors) could be a good option for small investors. It allows investment up to ₹2 lakhs, and SEBI guidelines ensure fair allotment through a lottery system in case of oversubscription. This makes it simple, transparent, and accessible for beginners.
• On the other hand, HNI, QIB, and Anchor categories are suited for big investors with large capital. Therefore, for investors who want to participate with lower risk and capital retail category might be a suitable choice. For more IPO insights, visit IPOplatform.com.
An IPO anchor investor list is the official record of big institutions and funds that have invested in an IPO before it opens for the general public. The anchor investor list is released by the company and the stock exchanges one day before the IPO opens. It includes details of mutual funds, foreign portfolio investors (FPIs), banks, insurance companies, and other Qualified Institutional Buyers (QIBs) who participated as anchor investors. The below snippet from IPOplatform.com shows the top anchor investors according to investment made in SME IPOs.
You can check the list on the NSE and BSE sites issued by the company before the opening of the IPO application process. The list includes all the anchor investors that have participated in the process and the number of shares allotted to them. The List of Anchor investors can be checked from business sites and information providers like chittorgarh.com, IPOplatform.com. The snippet below shows the list of anchor investors for Sattva Engineering on the IPO information section of the IPOplatform.com site.
Only QIBs invest in Mainboard IPO and SME IPO as anchor investors. Only big funds and financial institutions registered with SEBI are allowed as anchor investors. These include mutual funds, foreign portfolio investors (FPIs), venture capital funds, insurance companies, pension funds, and banks. They are part of the Qualified Institutional Buyer (QIB) category and must invest a minimum of around ₹10 crores to participate. Retail investors and small individual investors cannot apply as anchor investors. New IPO Listing.
An IPO Application Number is a unique identification number given to every IPO application submitted by an investor. This number is important because it allows investors to track their IPO application status easily.
By using the application number on the BSE, NSE, or registrar’s website, investors can check whether their application has been accepted and if shares have been allotted to them. In short, the IPO application number acts as a reference ID to monitor and verify your IPO application and allotment status. Explore Merchant Bankers in India
A bid in an IPO application means the price and quantity of shares you want to apply for. You choose how many shares you want and at what price (or select cut-off price). Based on your bid, the company may allot you shares.
You can apply for an IPO using UPI through the broker’s app or website. First you have to choose the IPO in which you want to apply and after selecting enter details about bid, price, your PAN number and provide your UPI id. Approve the UPI mandate you have received on your UPI app to block the amount for IPO application. Explore Upcoming Mainboard IPO.
You can check the IPO Allotment Status from the broker’s app or website by entering your details. You can check through NSE and BSE website by simple entering the PAN details and IPO application number.
Yes, investors can withdraw their IPO application at any time before the IPO closing date. This means if you change your mind, you can cancel your bid during the open subscription period. However, it’s important to note that some brokers may have their own specific bidding window timings, so investors should be aware of the rules and cut-off time set by their broker. Once the IPO closes, withdrawal is no longer allowed, and the application will be processed for allotment. Explore Upcoming SME IPO
ASBA stands for Application Supported by Blocked Amount. It is a process introduced by SEBI that allows investors to apply for an IPO without making any upfront payment. Instead of transferring money immediately, the required amount is just blocked in your bank account. The funds remain in your account and continue to earn interest until the IPO allotment is finalized. If you get shares, the blocked amount is deducted, and if not, the money is released automatically. Investors can apply for IPOs directly through their banks using ASBA, making the process secure, convenient, and hassle-free.
An IPO (Initial Public Offering) is open for subscription for a limited period. As per SEBI regulations, an IPO remains open for a minimum of 3 working days and a maximum of 10 working days. Investors must apply for shares only within this period. The IPO open date is the first day when applications are accepted, and the IPO close date is the last day to apply. Once the IPO closes, no further applications can be made. Knowing these dates is important so that investors do not miss the chance to subscribe to an IPO. Check Current IPO on Mainboard.
To apply for an IPO online in India, Investors must have a Demat account. Once the IPO is open, investor can apply through your broker’s trading app or via net banking using the ASBA facility. First log in, go to the IPO section, select the IPO you want to invest in, and enter the number of shares or lots you wish to apply for. You can either choose your own bid price or select the cut-off price option for higher chances of allotment. After submitting, the application amount will be blocked in your bank account until allotment. This makes the IPO application process easy, secure, and fully online. Check Current IPO on SME.
Yes, you can apply for an IPO even without UPI. Most banks provide the ASBA (Application Supported by Blocked Amount) facility through their net banking platforms. In this method, when you apply for an IPO, the required amount is only blocked in your bank account and not immediately debited. The money remains in your account and continues to earn interest. If you receive IPO allotment, the amount is deducted, and if not, the blocked amount is released automatically. This makes ASBA a safe and convenient way to apply for IPOs without using UPI.
Investors can easily check your IPO application status online. One of the most common ways is through the BSE (Bombay Stock Exchange) website. Simply follow these steps:
This will show whether your IPO application has been accepted, rejected, or if shares have been allotted to you. Checking IPO status online is quick, free, and helps investors stay updated.
To check your IPO application status on the NSE (National Stock Exchange) website, follow these simple steps:
The NSE portal will display whether your IPO application is accepted, pending, or if shares have been allotted. This is a quick and reliable way for investors to track their IPO status online.
An IPO Application Number is a unique identification number given to every IPO application submitted by an investor. This number is important because it allows investors to track their IPO application status easily.
By using the application number on the BSE, NSE, or registrar’s website, investors can check whether their application has been accepted and if shares have been allotted to them. In short, the IPO application number acts as a reference ID to monitor and verify your IPO application and allotment status. Explore Merchant Bankers in India
You can easily track upcoming SME IPOs by visiting websites that provide IPO updates. The portal ipoplatform.com also provides updates regarding upcoming Mainboard IPO where you can find all details about new SME IPOs, including issue dates, price bands, and recently filed DRHPs. It’s a simple way to stay updated on all upcoming IPOs in the SME segment.
Yes, you can apply for multiple lots in an IPO through a single application. A lot is the minimum number of shares you can apply for in an IPO. By selecting more lots, you increase your investment amount. However, allotment is still subject to availability and the IPO subscription demand.
Anyone with a valid PAN card and Demat account can apply for IPO. This includes, Individual investors, HNIs, NIIs, existing shareholders of the issuer company, Employees of the company. Check Detailed Mainboard IPO Eligibility
Anyone with a valid PAN card and Demat account can apply for IPO. This includes, Individual investors, HNIs, NIIs, existing shareholders of the issuer company, Employees of the company. Check Detailed Mainboard IPO Eligibility
IPO investors are people or institutions who apply for shares when a company offers them to the public. They can include retail individuals, HNIs, institutions, employees, and existing shareholders. Check Detailed SME IPO Eligibility
As per SEBI ICDR Regulations, 2018, individual retail investors must apply for a minimum of Rs 15,000 in an IPO. The maximum investment allowed for retail investors is Rs 2 Lakhs in a single IPO. If the investment amount exceeds Rs 2 lakhs, the investor is considered under the HNI (High Net-worth Individual) category. These limits ensure fair participation and equal opportunities for small investors in IPOs. Check Mainboard IPO list.
Investors can apply for an IPO in different ways. The most common methods are UPI (Unified Payments Interface) and ASBA (Application Supported by Blocked Amount) through net banking or broker platforms. Apart from these online options, investors can also apply by submitting a physical IPO application form at their Self-Certified Syndicate Bank (SCSB). Each method ensures that the application amount is blocked in the bank account and only debited if shares are allotted. This makes IPO applications safe, convenient, and flexible for all types of investors. Check Merchant Bankers for IPO
Anchor investors are big financial institutions like mutual funds, insurance companies, or banks that invest a large amount in an IPO one day before it opens to the public. They are called “anchors” because their investment builds trust and attracts other investors. Anchor investors usually get shares at the upper price band and have to invest a minimum of Rs 10 crore in a Mainboard IPO and Rs 2 crore in an SME IPO.
Yes, employees of the company going public can apply in IPOs under a separate reserved quota. This category is created especially for eligible employees and often comes with the benefit of a discounted share price compared to the general public issue. Employees can invest up to Rs 5 lakhs in this reserved quota, making it an attractive opportunity to become shareholders in their own company. Detailed SME IPO Process.
In a mainboard IPO, 35% of shares are reserved for retail investors. In an SME IPO, the retail reservation is at least 35%. This ensures that small investors get fair opportunities to participate in both Mainboard and SME IPOs.
The official trading window for IPO application open at 10:00 AM to 5:00 PM on the working days and the applications which are applied after the working hours they all are processed on the next working day. Check SME IPO Merchant Bankers.
On the last day of an IPO, the exchange cut-off time is 5:00 PM. This means applications must be submitted before this time. However, many banks and brokers set their own earlier deadlines commonly around 2:00 PM or 3:00 PM to ensure they have enough time to process all applications. Therefore, investors should always check the cut-off time with their broker or bank in advance to avoid missing out on the IPO. Explore RTA in IPO
Yes, you can apply for an IPO after market hours through ASBA (Applications Supported by Blocked Amount) using net banking, UPI, or broker platforms. IPO applications are allowed between 10:00 AM to 5:00 PM on trading days, as per exchange guidelines. Even if an application is made after 5:00 PM, then that application will be considered for the next working day. The regular stock market trading hours are 9:15 AM to 3:30 PM for both NSE and BSE. Hence, there is no restriction for IPO applications to live market trading hours and they can be done beyond them. Explore SME IPO in India
An Investors is required to contribute more than RS. 2 lakhs to an IPO in order to be eligible for the HNI (High Net-worth Individual) category. The application can be submitted via broker platforms that use UPI or through banks' ASBA (Application Supported by Blocked Amount) facilities. Investors must approve the mandate for blocking funds, enter the bid details, and choose the HNI category when completing the IPO application form. The blocked amount is either released (if not) or debited (if allotted) after allocation is complete.
To apply for an SME IPO in India, investors must have a Demat account. Once the SME IPO is open, you can apply through your broker’s trading app or net banking using the ASBA facility. Log in, go to the IPO section, choose the SME IPO you want to invest in, and enter the number of lots (keeping in mind SME IPOs usually have bigger lot sizes). You can either place your own bid price or select the cut-off price to improve the chances of allotment. After submission, the application money will be blocked in your bank account until allotment. This makes applying for an SME IPO convenient, safe, and completely online.