A practical walk through an IPO in India, written for promoters and CFOs. Pick the SME platform or the Mainboard to see who qualifies, what promoters must commit, how the offer document is filed and reviewed, and how the issue is priced and allotted, updated for the 2025 SME rules and the 2026 ICDR and public-offer amendments.
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Published 1 October 2026 · Mainboard section added 5 November 2026 · Samvaad Partners
Each chapter starts with what the rule is, then what it means in practice. Chapter 1 doubles as a self-check: tick off each condition before you appoint a lead manager. Figures reflect the SEBI ICDR Regulations as amended up to March 2026 and exchange criteria as of October 2026.
Eligibility is a series of gates. SEBI's ICDR Regulations set the floor for every SME issuer, and NSE Emerge and BSE SME each add their own tests on top. Clear all of them before you appoint the full IPO team: a gap found after the draft offer document is filed costs months.
Planning to move up to the Mainboard later? See our SME → Mainboard migration guide.
The offer document names the people who control the company, and the rules then ask them to keep real money in it. Getting the promoter group right matters: every member's holdings, relationships and litigation must be disclosed.
Start the family tree early. Relatives' companies, partnerships and litigation all need to be traced and disclosed. It is the slowest data to collect and the one most often incomplete.
Lock-in periods run from the date of allotment. The split release of excess promoter holding applies since 2025.
An SME IPO is run by a team of SEBI-registered intermediaries, each with a defined legal responsibility. The lead manager sits at the centre and is accountable for the offer document. Tap any role to see what it does.
A SEBI-registered merchant banker that checks eligibility, leads due diligence, drafts the offer document, deals with the exchange, markets the issue and oversees allotment. Where there is more than one, their responsibilities are split in writing.
A SEBI-registered merchant banker that checks eligibility, leads due diligence, drafts the offer document, deals with the exchange, markets the issue and oversees allotment. Where there is more than one, their responsibilities are split in writing.
Runs legal due diligence on title, approvals, contracts and litigation, drafts the legal sections of the offer document and the issue agreements, and issues legal opinions.
Examines and reports on the restated financial statements, and certifies key performance indicators, tax benefits and other financial data used in the offer document. Must hold a valid ICAI peer review certificate.
Processes applications, works out the basis of allotment with the exchange, credits shares, unblocks or refunds money and handles investor complaints.
An SME issue must be fully underwritten. The lead manager must take at least 15% of the issue on its own account; the rest can be shared with other underwriters.
Provides continuous buy and sell quotes in the shares for at least three years after listing, so that investors can trade even when volumes are thin.
Hold application money through ASBA and UPI. A sponsor bank links the issue to the UPI system so investors can bid from a phone.
A qualified company secretary appointed by the company before filing. The single point of contact for the exchange, SEBI and investors, and responsible for disclosures once listed.
Required where the issue size exceeds ₹50 crore. Reports each quarter on whether the money raised is being used as promised. For smaller issues, the audit committee reviews use of proceeds.
Builds the equity story, prepares management for investor meetings, handles media around the issue and sets up investor relations for life as a listed company.
Choose the lead manager on track record, not only fees. Ask how many of its SME issues listed on time, how they traded after a year, and how many draft offer documents it has had returned. A lead manager whose draft was returned by the exchange in the past six months cannot file for a while.
Every statement in the offer document has to be backed by a document. Due diligence is how the lead manager, lawyers and auditors check that, and it ends with the lead manager signing a due diligence certificate that is filed with the offer document. Plan for four to eight weeks of intense document requests.
Missing allotment records, unfiled RoC forms, unpaid statutory dues, loans to promoters, and properties held in a promoter's personal name.
An internal pre-diligence, run by your CFO and company secretary with the lead manager's checklist, surfaces most gaps months before they become delays.
Keep every document in a single indexed data room. The same file will be requested by lawyers, auditors, the exchange and, later, investors.
The financial statements in an offer document are not simply last year's audited accounts. They are restated, so that three years are comparable, and they must be examined by an auditor who holds a valid peer review certificate from the ICAI's Peer Review Board.
Statutory audits for the last three financial years, plus a stub period if the latest year-end is more than six months old at filing.
Errors, changes in accounting policy and audit qualifications are adjusted back into the years they belong to, so all periods follow the same policies.
The peer-reviewed auditor examines the restated statements and reports on them, following the ICAI guidance on reports in company prospectuses.
The restated statements, the examination report and auditor certificates on KPIs and other figures go into the offer document.
Check first: ask your auditor for a copy of the ICAI peer review certificate and its validity dates before restatement starts.
For an SME issue, the draft offer document goes to the SME exchange, not to SEBI for observations. The exchange reviews it, questions it, often visits the company and meets the promoters, and then grants in-principle approval. SEBI receives a copy for its records.
The draft offer document is filed with the lead manager's due diligence certificate and, since March 2026, a draft abridged prospectus.
A newspaper advertisement tells the public the draft is available, with a QR code linking to it.
Anyone can comment on the draft. The lead manager reports the comments received to the exchange.
The exchange raises queries, may inspect the premises and usually meets the promoters. Responses and changes are worked into an updated draft.
Once satisfied, the exchange grants in-principle approval to list, and the company moves to the red herring prospectus.
The company and its lead manager set the price; the regulator does not. What the rules control is how the price is presented: the width of the band, when it is announced and the figures that must justify it.
A price band is announced. Investors bid within it, and the final price is set after the issue closes, based on demand.
A single price is stated in the offer document before the issue opens. Investors know the price; demand is known only at the end.
Illustrative only. The lead manager sets the actual lot size and price band.
The price band is published at least two working days before the issue opens, in the same newspapers as the pre-issue advertisement and on the exchange website.
KPIs certified by the auditor and approved by the audit committee, peer comparison, and the prices at which shares were issued or transferred in the recent past, set against the band.
The final price cannot be below face value. A discount for retail or employee applicants is allowed if stated in rupees in the offer document; anchor investors cannot get a lower price than others.
The offer document goes through four versions. Each one adds what has been settled since the last, until the final prospectus records the price at which shares were actually allotted.
Filed with the exchange and made public for comments. No price, and the issue size may still change.
Reflects exchange queries, public comments and any updated financials, ahead of in-principle approval.
Filed with the Registrar of Companies. Complete except the final price and number of shares. The issue opens at least three working days later.
Filed with the Registrar of Companies after bidding closes, with the final price and issue size, then shared with the exchange and SEBI.
| What it contains | Draft RHP | RHP | Prospectus |
|---|---|---|---|
| Business, risks, financials | Yes | Yes, updated | Yes |
| Exchange observations addressed | No | Yes | Yes |
| Price band and issue dates | No | Yes, or by advertisement | Yes |
| Final price and number of shares | No | No | Yes |
| Where it is filed | SME exchange | Registrar of Companies | Registrar of Companies |
Watch the clock on financials. If the approval process runs long, the financial information in the document may become more than six months old and need updating, which means another round with the auditor.
SME issues come with protections that Mainboard issues do not need: full underwriting and a market maker. They also follow the same tight calendar to listing.
Within the non-institutional portion, one-third goes to applications of up to ₹10 lakh and two-thirds to larger ones.
Few retail investors read a 300-page offer document. Under the ICDR amendments in force since 21 March 2026, a short, standard-format abridged prospectus now travels with the offer document from the very first filing, and investors reach it with a QR code.
A draft abridged prospectus is filed alongside the draft offer document, and a final version with the red herring prospectus.
Both versions are hosted on the websites of the company, the lead managers and the exchange, so the public can read them during the comment period.
Application forms carry QR codes that link to the red herring prospectus, the abridged prospectus and the price band advertisement.
The separate offer document summary was removed. The summary now also covers contingent liabilities and related party transactions.
The abridged prospectus is the version most investors will actually read, so it deserves the same care as the investor presentation. Plain language, a clear business summary and the right top risks shape first impressions long before the roadshow.
A Mainboard IPO is for established companies with a longer profit record and a larger float. It is reviewed by SEBI itself, not only by an exchange, and carries heavier disclosure and a higher public shareholding from day one.
| SME IPO | Mainboard IPO | |
|---|---|---|
| Size of company | Post-issue paid-up capital up to ₹25 crore | No ceiling; net tangible assets of ₹3 crore or more |
| Profit test | EBITDA of ₹1 crore in 2 of the last 3 years | Average operating profit of ₹15 crore over 3 years, a profit in each year (or the QIB route) |
| Who reviews the draft | The SME exchange; SEBI gets a copy | SEBI issues observations on the draft offer document |
| Promoter lock-in | 3 years on the minimum contribution | 18 months (3 years if proceeds mainly fund capital expenditure) |
| Underwriting and market maker | Compulsory | Not required by SEBI |
| Minimum application | ₹2 lakh | One lot of roughly ₹15,000; retail bids up to ₹2 lakh |
| Timeline to listing after close | T+3 | T+3 |
SEBI's ICDR Regulations give a company two routes to the Mainboard: a profitability route based on track record, and a route for companies that fall short, where institutions take most of the issue. Check which route fits before you appoint the lead manager.
Two ways to lose a year. Operating profit is measured on restated, consolidated numbers, so a profit that looks fine in the signed accounts can fall short after restatement. Run the test on restated figures early, and look at the name-change and monetary-asset conditions at the same time.
Promoters must show long-term commitment. The rules fix how much they must hold after the IPO and how long that holding, and the shares of other pre-IPO investors, stays locked in.
| Shares | Standard | If proceeds mainly fund capex |
|---|---|---|
| Promoters' minimum contribution (20%) | 18 months | 3 years |
| Promoter holding above the minimum | 6 months | 1 year |
| Other pre-IPO shareholders | 6 months | 6 months |
| Anchor investors' allotted shares | Half for 30 days, the rest for 90 days | |
SEBI limits how loosely the money can be described, and the Securities Contracts (Regulation) Rules decide how much of the company must be offered to the public. Those public-offer norms were rewritten in March 2026.
The minimum offered to the public now depends on the company's post-issue market capitalisation, measured at the offer price.
| Post-issue market cap | Minimum public offer |
|---|---|
| Up to ₹1,600 crore | At least 25% |
| ₹1,600–4,000 crore | Shares worth ₹400 crore |
| ₹4,000–50,000 crore | At least 10% |
| Above ₹50,000 crore | Graded, lower floors |
Companies in the middle bands must reach 25% public shareholding within 3 years of listing; the largest issuers get longer windows. The rules also carry a floor of 2.5% for any issue. Work out where your post-issue valuation falls before deciding the size of the fresh issue and the offer for sale, because that choice sets how much promoters sell and how much dilution the company takes.
Unlike an SME issue, the Mainboard draft offer document is filed with SEBI, which issues observations before the company can go ahead. The calendar below shows the sequence.
The board approves the public offer and a special resolution is passed at a general meeting. The resolutions are filed with the Registrar of Companies within 30 days.
A SEBI-registered merchant banker as lead manager, legal counsel, auditors, a registrar to the issue, bankers, and a company secretary as compliance officer. Sign the agreements with both depositories.
The lead manager leads due diligence and drafts the offer document on restated, consolidated financials.
The draft offer document is filed through the lead manager with the prescribed fee, and also with the stock exchanges.
The draft is public for at least 21 days, announced in English and Hindi newspapers within two days of filing.
SEBI raises observations; the company responds and files an updated draft. The issue must open within 12 months of SEBI's observations.
The exchanges give in-principle approval, 1% of the issue amount is deposited with the designated exchange, and the red herring prospectus is filed with the Registrar of Companies at least three working days before the issue opens.
Bids come only through ASBA or UPI. The issue stays open for at least 3 and at most 10 working days.
Shares list within three working days of the issue closing. The company then files its allotment returns and moves from an unlisted to a listed company on the Registrar's records.
Most Mainboard IPOs are book built: investors bid within a price band, and the final price is set after bidding. How the shares are split between investor groups depends on the eligibility route.
| Share of the net offer | Profitability route | QIB route |
|---|---|---|
| Qualified institutional buyers | Up to 50% | At least 75% |
| Non-institutional investors | At least 15% | At least 15% |
| Retail individual investors | At least 35% | At least 10% |
Anchor investors may be allotted a part of the QIB portion a working day before the issue opens, with the lock-in shown in Chapter 2.
On the Mainboard, the story is priced by institutions. The anchor book and the QIB bids set the tone for the whole issue, so the equity story and the investor presentation need to be settled before the roadshow starts, not after the draft is filed.
Your lead manager, lawyers and auditors make sure the company qualifies and the documents are right. We work alongside them on what investors see and hear: the equity story, the investor presentation, the roadshow and the media.
After listing, we run the investor relations programme that keeps the story consistent through results, disclosures and analyst conversations. See our investor relations services.
Most SME IPOs take six to nine months from appointing the lead manager to listing day. Restating the financial statements, due diligence and drafting the offer document take the most time, followed by the exchange review. Once the issue opens, shares list three working days after it closes.
No. For an SME IPO the draft offer document is filed with the SME exchange, which reviews it and grants in-principle approval. SEBI receives a copy for its records but does not issue observations, unlike a Mainboard IPO.
Promoters must hold at least 20% of the post-issue capital as their minimum contribution, locked in for three years from allotment. Since 2025, promoter holding above that 20% is released in two halves, after one year and after two years.
The company decides the price band with its lead manager. The top of the band can be at most 120% of the floor price, and the band must be announced at least two working days before the issue opens, with key financial ratios at both ends of the band.
Yes. An SME issue must be fully underwritten and a market maker must provide two-way quotes in the shares for at least three years from listing, so that investors can buy and sell even when trading is thin.
It is a short, standardised summary of the offer document. Since the ICDR amendments of March 2026, a draft abridged prospectus must be filed along with the draft offer document and published on the company's and intermediaries' websites, and application forms carry QR codes linking to it.
Under SEBI's ICDR Regulations a company needs net tangible assets of at least ₹3 crore in each of the last three full years (no more than 50% in monetary assets), average operating profit of at least ₹15 crore over the last three years with a profit in each year, and net worth of at least ₹1 crore in each of those years. A company that misses a test can still list through the QIB route.
A company that does not meet the profitability, net tangible assets or net worth tests can still list if the issue is book built and it undertakes to allot at least 75% of the net offer to qualified institutional buyers. If that portion is not met, all application money is refunded.
Yes. The draft offer document of a Mainboard IPO is filed with SEBI through the lead manager, made public for at least 21 days for comments, and SEBI issues observations. The issue must open within 12 months of those observations.
Promoters must hold at least 20% of post-issue capital. That minimum contribution is locked in for 18 months from allotment, or 3 years where most of the proceeds fund capital expenditure. Promoter holding above the minimum is locked in for 6 months, and pre-IPO shares of other holders for 6 months.
It depends on post-issue market capitalisation. Under the Securities Contracts (Regulation) Amendment Rules, 2026, a company with market capitalisation up to ₹1,600 crore offers at least 25%, one between ₹1,600 and ₹4,000 crore offers shares worth ₹400 crore, and one between ₹4,000 and ₹50,000 crore offers at least 10%, with longer windows to reach 25% public shareholding.
Talk to us before the draft offer document is written. We work alongside your lead manager so that investors meet a clear, consistent company from the first roadshow meeting to listing day.
hi@samvaad-partners.com · +91 99980 37969 · samvaad-partners.com