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Home / SEBI & Capital Markets / SME IPO
Last updated: 2 October 2026
An SME IPO lets smaller companies raise equity and list on the SME platforms of NSE or BSE. SEBI tightened the rules in 2025. Expertvuw’s team handles the corporate readiness, restructuring and secretarial work, and coordinates with the merchant banker, auditors and legal counsel.
SME IPOs are governed by Chapter IX of the SEBI (ICDR) Regulations, 2018 and the listing criteria of NSE Emerge and BSE SME. The issue must be managed and fully underwritten by a merchant banker, with market-making arrangements after listing.
SEBI amended the SME framework in March 2025. Issuers now need an operating profit (EBITDA) of at least ₹1 crore in two of the last three financial years. Offer for sale is capped at 20% of the issue size, with selling shareholders limited to 50% of their holding; funds for general corporate purposes are capped at the lower of 15% of the issue or ₹10 crore; and proceeds cannot be used to repay loans from promoters or related parties. The minimum application size is two lots, and the draft offer document is open for public comments for 21 days.
Exchanges also apply their own criteria on track record, net worth, net tangible assets and free cash flow, so readiness should be checked against both SEBI and exchange rules.
Basis: SEBI (ICDR) Regulations, 2018 – Chapter IX, as amended in March 2025; SEBI (LODR) Regulations, 2015; NSE Emerge and BSE SME eligibility criteria; Companies Act, 2013. Last updated: 27 September 2026.
EBITDA of at least ₹1 crore in two of the last three financial years.
Offer for sale capped at 20% of issue size.
General corporate purposes capped at the lower of 15% of issue size or ₹10 crore.
Two lots.
Draft offer document open for public comments for 21 days.
Issue must be 100% underwritten, with market making after listing.
Readiness issues often surface late in the process.
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SME IPO connects with these services.
Converting to a public company.
Post-listing LODR compliance.
PIT compliance after listing.
Updating statutory registers.
Check eligibility and gaps.
Convert to public company and clean capital structure.
Set up board, committees and policies.
Support secretarial due diligence for the DRHP.
Coordinate with the merchant banker for exchange filing.
Set up LODR and PIT compliance.
Listing brings continuing obligations.
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Operating profit (EBITDA) of at least ₹1 crore in two of the last three financial years, following the March 2025 amendments.
Offer for sale is capped at 20% of the issue size, and each selling shareholder can sell up to 50% of their holding.
Two lots.
Yes. SME IPOs must be 100% underwritten, with market making after listing.
Yes, subject to exchange migration criteria.
ACS – Director, Expertvuw Management Pvt Ltd
SEBI applications and filings are prepared by Expertvuw’s team. Certificates, audits and due diligence that SEBI regulations reserve for practising professionals or registered intermediaries are provided by independent registered professionals, and representation before SEBI or SAT is made by advocates or authorised professionals.