Three Years of Track Record Mandatory For SME IPO

This IPO News guide/article covers “Three Years of Track Record Mandatory For SME IPO”. The page is organized around 1. applicant company must be in existence for 3 years or more, 2. sole proprietorship/partnership firms converted into company, 3. promoters must have 3 years of experience, 4. must have operating profits for at least 2 years, 5. positive net worth. IPO News presents the structured facts and tables in its own layout and wording.

Topics Covered

• 1. Applicant Company must be in Existence For 3 years or more
• 2. Sole proprietorship/Partnership firms converted into company
• 3. Promoters must have 3 years of experience
• 4. Must have Operating Profits for at least 2 years
• 5. Positive Net Worth
• 6. Project Funded by NABARD/SIDBI/Banks or Financial Institutions
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Key Facts

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• Below is how you can fulfill the 3-year track record criterion for an SME IPO;
• If the applicant company seeking listing on NSE SME is less than three years old, the promoters or the promoting company, which can be incorporated in and outside India, must have a history of three years.
• Additional criteria for listing on NSE Emerge;
• To be listed on the SME Exchange, the promoters of the company (one or more persons) must have at least 3 years of experience in the same field of business.
• The promoters must individually or jointly own at least 20% of the post-issue share capital.
• Being in existence for 3 years is not enough, as you must prove that your company is in good financial health.
• The criteria of the BSE SME and NSE SME stock exchanges require companies to have been profitable for at least two years in the last three financial years prior to the date of the IPO application.
• The net worth of the SME must be positive to list on NSE Emerge, while at BSE SME, the minimum net worth required is Rs 1 crore for 2 preceding full financial years.
• Net worth is the total assets of a company minus all liabilities. To qualify for an SME IPO, the net worth is calculated as per SEBI (ICDR) regulations.
• According to the BSE and NSE criteria for SMEs, companies must have a positive net worth, which means that the company must have more assets than total liabilities.
• If an SME does not fulfil the requirements of 3 years of existence, but the project for which it is going public is funded by NABARD, SIDBI, banks, or other financial institutions, will be eligible for a BSE SME IPO.
• Yes, 3 years of operational existence is not a mandatory criterion for such companies. And, such companies have to submit audited financial results for at least one full financial year.
• 10 Key Things to be Considered by SME Promoters before going public via SME IPO

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