NSE Emerge SME IPO Eligibility Criteria

This IPO News guide/article covers “NSE Emerge SME IPO Eligibility Criteria”. The page is organized around 1. company incorporation, 2. post-issue paid-up capital, 3. sme track record, 4. sme net worth and minimum profitability criteria, 5. positive free cash flow. IPO News presents the structured facts and tables in its own layout and wording.

Topics Covered

• 1. Company Incorporation
• 2. Post-issue Paid-up capital
• 3. SME Track Record
• 4. SME Net worth and Minimum Profitability Criteria
• 5. Positive Free Cash Flow
• NSE Emerge Exchange Guidelines to Calculate Free Cash Flow to Equity (FCFE)
• 6. Promoters Lock-in and restriction on OFS
• 7. Restriction on Fund Utilization
• 8. Additional Listing Requirements for NSE SME
• 9. Disclosure Requirements
• 10. Rejection Cooling Off period
• SME IPO Enquiry
• Compare Stock Brokers Side-by-Side

Key Facts

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• Small business founders who want to get listed on the NSE Emerge must have their company incorporated in the Companies Act 1956 or 2013 in India.
• SME owners whether want to get listed on BSE SME or NSE Emerge, the after-issue paid-up capital should not exceed Rs 25 crore. Companies above Rs 25 crore paid-up capital will be listed on BSE and NSE exchange.
• SMEs must be operational for a minimum of 3 years to take their company public.
• The applicant company seeking listing has completed 3 years of operations or more.
• Promoters or promoting companies, in or outside India, must have a minimum of 3 years of experience and hold at least 20% of post-issue share capital individually or collectively
• Proprietary or partnership firms that have been converted into a company has 3 years of operational history (not as a company but overall)
• Here, FCFE is the net cash available after meeting all operating expenses, interest obligations, taxation, capital expenditures, and repayment of debt.
• FCFE = Cash Flow From operations – Purchase of Fixed Assets + Net Borrowings – Interest *(1-T)
• Interest (1-T) = Interest expense on short-term and long-term borrowings * (1-tax rate)
• OFS size in SME IPO is restricted to 20% means any SME IPO can have maximum 20% OFS and remaining 80% as fresh issue. No SME can offer IPO via 100% offer for sale.
• Promoters who are selling shares in the company (Selling shareholders) cannot sell more than 50% stake or shareholding.
• Minimum promoters contribution is locked for 3 years and 50% of excess of minimum contribution is locked for 1 year and rest for 2 years.
• SME cannot use more than 15% of total funds raised or Rs 10 crore, whichever is lower to meet general corporate purposes.
• The issuer has not been involved in any regulatory misconduct and no disciplinary action has been taken by a regulatory authority in the past 3 years.
• Any materialistic regulatory or disciplinary action by the stock exchange or regulatory authority against the promoters, promoting company (ies), other companies promoted by the SME promoters in the last 1 year
• Default in interest and principal payment to debenture, bond, and fixed deposit holders in the last 3 years
• The company seeking listing, their application should not have been rejected in the last 6 months. Means, if the exchange has rejected any company’s application, it is not eligible to apply for listing within 6 months.
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• NSE Emerge SME IPO Eligibility Criteria

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