SEBI’s New Norms for SME IPOs: Key Changes and Implications on SMEs

This IPO News guide/article covers “SEBI's New Norms for SME IPOs: Key Changes and Implications on SMEs”. The page is organized around 1. minimum profitability criteria for sme ipo, 2. maximum limit on sme ipo offer for sale (ofs), 3. lock-in period on promoter’s shareholding, 4. restrictions on the use of sme ipo proceeds, 5. increase in minimum investment amount for sme ipo. IPO News presents the structured facts and tables in its own layout and wording.

Topics Covered

• 1. Minimum Profitability Criteria for SME IPO
• 2. Maximum Limit on SME IPO offer for sale (OFS)
• 3. Lock-in period on promoter’s shareholding
• 4. Restrictions on the use of SME IPO proceeds
• 5. Increase in Minimum Investment Amount for SME IPO
• 6. Allotment of Shares to Non-Institutional Investors
• 7. Higher level of Transparency
• 8. Raising further capital post-SME IPOs without migration
• SME IPO Enquiry
• Compare Stock Brokers Side-by-Side

Key Facts

• India's trusted financial research platform since 2015. Live IPO GMP, subscription data, allotment status, Rights Issues, NCDs and unbiased stock broker reviews.
• Let’s check out what are the new amendments announced by SEBI and how it will affect the small and medium enterprises (SMEs) decision to go public.
• SMEs planning for IPO must have a minimum EBITDA (Earnings before interest, tax, depreciation, and amortization) of Rs 1 crore for at least two out of three preceding financial years.
• SEBI has put a phased lock-in period on the promoters’ shareholding over the minimum promoter contribution (MPC). Here’s the lock-in period provision;
• 50% holding of promoters in excess of the MPC can be released after one year from the date of IPO allotment, and
• The remaining 50% shareholdings can be unlocked after 2 years.
• SEBI’s new regulations specify how SMEs can use the funds raised through IPO. SEBI restricts companies to use for the following purposes;
• Meeting general corporate purposes which is the most common objectives of many SME IPOs, SEBI has put a maximum cap of 15% of total issue size or Rs 10 crore, whichever is lower.
• To maintain uniformity in the IPO allotment process, SEBI said that the same approach of share allotment will be followed or non-institutional investors in SME IPOs, as to that of mainboard methodology.
• Out of NII quota, one-third will be reserved for subscription by small NIIs (for bidding amount up to Rs 10 lakh) and two-third will be for big NIIs (for bidding amount exceeding Rs 10 lakh).
• SEBI’s amended norms allow SMEs to raise additional capital through further issues without even migrating to the mainboard exchange, even if the post-issue paid-up capital exceeds Rs 25 crore.
• Companies listed on the SME platform (NSE Emerge or BSE SME) are now subject to compliance with related party transaction (RPT) norms, just like the mainboard listed companies.
• Refer SEBI Issue of Capital and Disclosure Requirements (ICDR) (Amendment) Regulations, 2025 for detailed insights.
• BSE SME IPO Eligibility Criteria
• SME IPO Listing Platforms BSE SME and NSE Emerge
• Rajasthan Global Securities Pvt. Ltd: The First Institutional Investor to Anchor 100 SME IPOs
• SEBI's New Norms for SME IPOs: Key Changes and Implications on SMEs
• NSE Emerge SME IPO Eligibility Criteria

Source record: View original public source ↗