An SME IPO lists your company on the SME platform of BSE or NSE. It raises money from the public in a smaller issue, with lighter rules than a main-board listing. In 2025 SEBI tightened who can use it, and in October 2026 it proposed tightening it again. Before you appoint bankers, check that you qualify, and that you are ready to run a listed company.
Who can list now
Since SEBI's 2025 changes:
- Profit. The company must have an operating profit of at least ₹1 crore from operations in at least two of the three preceding financial years.
- Offer for sale. Existing shareholders may sell no more than 20% of the issue.
- General corporate purposes. No more than 15% of the money raised, or ₹10 crore, whichever is lower, may be used for general corporate purposes.
BSE and NSE add their own conditions, so check the current criteria of the platform you choose.
Proposed, not yet in force: on 14 October 2026, SEBI proposed replacing the profit test with an average operating profit of at least ₹3 crore a year over the three preceding years, based on restated consolidated accounts. Until a change is notified, the ₹1 crore test applies.
What changes when you list
Listing makes you a listed company under the Companies Act, and duties follow:
- Whole-time officers. A managing director, CEO or whole-time director, a whole-time CFO and a whole-time company secretary.
- Independent directors. At least one-third of the board.
- Board committees. An audit committee, and a nomination and remuneration committee.
- Reporting. Half-yearly results and timely disclosure of material events to the exchange.
Only a public company can offer shares to the public, so a private company converts first.
A 12-month readiness plan
- Months 1–3Diagnose
Test eligibility on restated numbers, not management accounts. Clean up accounting policies, related-party transactions and open tax matters. Appoint a merchant banker.
- Months 3–6Fix governance
Convert to a public company. Appoint independent directors, form board committees and hire a whole-time CFO and company secretary.
- Months 6–9Prepare the offer document
Three years of audited and restated accounts, due diligence and the draft offer document.
- Months 9–12File and list
File with the exchange, answer its questions, market the issue and list.
Four questions before you start
- 01Is the money for growth you can describe? The use of proceeds is now examined closely.
- 02Can finance close the books every month, on time? A listed company reports on a fixed calendar.
- 03Are you ready for public scrutiny of related-party dealings and promoter pay?
- 04Would a private round or debt do the job with less cost and less disclosure?
