Discover the latest SME IPO trends with Amicus Growth Advisors' comprehensive guide. Unlock insights and navigate the SME IPO landscape effectively.

1. SME IPO
Trends
Input a summary about the purpose here or
the message and issue ofwhatyou want to tell.
ExploreMore
Home Product Features Contact
December 2023
ACompleteGuidetoUnderstandSMEIPoTrends

2. SME Business
Classification
Criteria
Not more than Rs 10 crore
Investment in PPE
Small Enterprise Medium Enterprise
Not more than Rs 50 crore
AnnualTurnover Not more than Rs 50 crore Not more than Rs 250 crore

3. In India, SME platform was introduced to serve as a medium of equity financing for small
and medium enterprises which are not able to list their issues on main board of stock
exchanges because ofthe stringent eligibility criteria. Since its inception in 2012, it has been
actively serving its rationale. During these 12 years, over Rs 13,500 crore was raised on the
two platforms.
Rs 13,500 Cr +
RaisedThrough SME IPOs
SME IPOs are Shining
880+
Total SME IPOs Listed
Average Amount Raise Per IPO

4. Boom in SME Stocks
Amere Rs.1,000 investment inAugust
2012 would be worth Rs. 4.65 lakh by 2023,
translating to a staggering 46,500%
return over a decade.

5. The Year of SME IPOs 2023
-8%
9%
36%
64%
93% 158%
Return Range for IPO that are Listed in 2023 , with overall Average Being 35%

6. Sector Wise SME IPOs in Last Decade
(Top 20 Sectors of IPO)

7. Lead Manager Performance
There have been more than 400 SME IPOs in Last 5Years.
ButAround 260 issues were managed byTop 10 Lead Managers
Avg Listing
Day Gain

8. SME IPO - Migration to Main Board
The Silk Route to the Main Board
SME listed companies may migrate to main board bytwo methods
Voluntarily Compulsorily
when issue capital of
company exceeds Rs. 10
crore but below Rs. 25
crore
when issue capital of
company exceeds Rs. 25
crore
SMEsmigratedtoBSEandNSEMainboard
As on Nov 30, 2023,total of 886 companies listed together on the BSE and SME exchange in India so far. Out ofthese, 319 companies
have migrated to the main board exchange.
BSE SME NSE Emerge Total
SMEs Shifted to Main Board 181 138 319

9. Migration Criteria
Criteria
Paid-up Capital
Minimum Rs 10 crores post-issue
paid-up capital
Minimum paid-up capital Rs 10 crore.
Net Worth
Minimum Rs 15 crore for the preceding 2
financial years.
Net worth requirement Rs 50 crore.
Market Capitalization
Rs 25 crore or above based on the
weighted average price of the preceding
three months.
Market capitalization minimum Rs 25
crore.
Listing period on NSE /
BSE or track record
Listed on BSE SME platform for at least 3
years, earlier before Nov 23 it was 2
years.
Listing on NSE SME for 3 years.
Profitability
requirement
Positive EBITDA in any 2 out of the last 3
financial years, positive PAT in the
immediate preceding financial year.
• Positive EBITDA for 3 preceding
financial years is a prerequisite.
• Profitable with positive PAT in the
immediate financial year is essential.
Minimum number of
shareholders
At least 250 public shareholders. Minimum 1000 public shareholders
* This list is indicative only and non exhaustive

10. Navigating the SME IPO Terrain:
Unraveling Expenses and Intermediary Duties for Corporate Success

11. SME IPOs Expenses
The cost of SME IPO ranges from 50 lakhs to a few crores, For a small IPO of less than 25 crore
rupees, the merchant banker charges a fee of about 25 lakhs, and 11 lakhs is for fees for
various services.
Services Fees Exchange Charges Misc Charges
• Issuing company pays intermediary
fees.
• Includes merchant bankers, registrar,
legal counsel, auditor, advertising,
printing fees.
• Also covers market maker,
underwriting, bank fees, and other
professional fees.
Stock Exchange Listing
Fees:
• Company pays fees for admission,
processing, listing, and annual fee.
• Fee structure for NSE SME Emerge
and BSE SME.
• Underwriting expenses.
• Marketing and PR expenses.
• Out-of-pocket expenses for
intermediaries (travel, transportation,
communications, duplication,
procurement, and delivery of
documents).
• Expenses for road shows, site visits for
journalists, bloggers, and influencers.

12. SME IPO Process Free structure (End to End Process)
_
_
Service
Expense
Exchange
Charges
Misc. Charges
❖ Please note that above fee structure is for reference only

13. Roles and Responsibilities of Merchant Bankers in SME IPO
Educating the issuing
company
• The issuer's eligibility for listing,
• Capital requirements,
• Market rules and regulations,
• the IPO process, and
• Pre- and post-listing needs.
Due Dilligence
• Gather licensing and tax data.
• Compile audited reports.
• Collect board and employee information.
• Assess financial status and assets.
• Analyze market growth data.
• Evaluate company's IPO eligibility.
Planning the IPO structure
• Type and number of securities.
• Fully or partly paid-up shares.
• Par value and lot size.
• Minimum order quantity and price.
• Proportion of investor categories.
• Booking period details.
• Employee reservation and discount.
• Market maker's share, etc.
Submission of DRHP to
Stock Exchange/SEBI/RoC
• File DRHP with stock exchange, SEBI, and
RoC.
• Stock exchange reviews SMEIPO documents.
• Exchange grants "In-Principle" approval.
• Approval conditional on meeting all
requirements.
• RoC issues final approval

14. Roles and Responsibilities of Merchant Bankers in SME IPO
Listing and post-issuance
formalities
• Documents approved by SEBI and stock
exchanges.
• Shares listed under SME IPO launch.
• Merchant bank handles listing formalities.
• Continues post-listing documentation and
compliance.
Underwriting
• Legal mandate: 100% underwriting for SME IPOs.
• Minimum 15% obligation for merchant bankers.
• Remaining 85% managed by third-party fund
manager.
• Issuing companies pay underwriting fees as a
share price discount.
IPO roadshow and publicity
• Application filing and prospectus preparation
• Organizes SME IPO roadshow for investors.
• Roadshow includes presentations to institutional,
mutual, pension, and hedge funds.
• Key details presented: company model, financials,
legal disclosures, growth prospects, and offering
specifics.
Drafting of contracts
• Comprehensive investor information.
• Offering details and industry overview.
• Financial statements and IPO timeline.
• Company liabilities, including legal challenges.
• Risks: industry, market, and company-specific.
Drafting of Prospectus
• Tripartite Agreement with NSDL, CDSL, and
Registrar
• Underwriting Agreement & Market Making
Agreement.
• Agreement with Bankers, Registrar to Issue.
• Board/Shareholder Resolutions.
• Forms/applications for filing with Exchange, RoC,
and regulatory agencies.

15. Roles of Chartered Accountant & Company Secretary in SME IPO
Chartered
Accountant
Company
Secretary
• Due diligence for regulatory
compliance.
• RoC compliance support.
• Certification of financial statements.
• Audit of financial statements
• Financial due diligence.
• Business forecasting and valuation.
• Reviewing 3 years of restated
financial information.
• Certification of financial information
(income statement, cash flow
statement, or balance sheet)
• Statement of Tax Benefit.
• Certificate on Object of the issue.
• Compliance with disclosure
requirements.
• Advises the company on
corporate restructurings.
• Corporate and capital structuring.
• Details of group companies.
• Litigation and material
developments.
• Compliance with LODR and
corporate governance.
• Compliance with listing
agreement.
• Brokerage and securities audit.

16. Roles of Registrars & Underwriter in SME IPO
Registrars
Pre IPO -
• IPO planning and resource alignment.
• Informing Self-Certified Syndicate Bank (SCSB) of the
IPO process and timelines.
Between IPO Closure to Pre Listing -
• Receive the final bid file from the exchanges.
• Validate the IPO application data.
• Coordinate with bankers to ensure that final collection
certificates are received.
• Identify invalid applications to reject.
• Reconcile the banked bids with the Final Bid file.
• Prepare the basis of allotment with lead managers.
• Submit the basis for approval to the Stock Exchange.
• Process the allotment of shares.
• Send funds debit and funds unblocking files to SCSBs.
Post Allotment -
• Resolve all the customer complaints.
Underwriter
• Underwriting Agreement compliance oversight.
• Selling agreed share quantity.
• Purchasing unsold shares.
• Co-organizing successful IPO roadshow.
• Assisting in share valuation.
• Advising and supporting issuer.

17. Roles of Banker, Merchant Banker & Legal Advisors in SME IPO
Banker
Merchant
Banker
Legal
Advisors
• Assess legal eligibility for IPO.
• Verify company and directors.
• Provide legal advice on legal
matters.
• Draft legal documents,
memoranda and related
documents.
• Review of legal materials.
• Preparation of dispute resolution
procedures.
• Monitoring the implementation of
legal clauses.
• Instruct bankers for deposit
coordination.
• Send payment instructions to
UPI.
• Designate banks for handling
tasks.
• Clarify fund status for basis.
• Facilitate SME stock liquidity.
• Provide 2-way quotes.
• Guarantee execution of quoted
orders.
• Abide by defined bid-offer spread.
• Restriction on buying from
promoters.
• Maintain a minimum quote depth.
• Presence required for 75% of
market time.
• Ensure minimum inventory on
allotment.

18. Pitch Deck By
Amicus GrowthAdvisors
Thank
You
The Business Think Tank
Contact Us
Sanjeev Jain
Managing Partner
sanjeev.jain@amicusllp.com
Akshat Agrawal
Engagement Manager
akshat.agrawal@amicusllp.com
+91-94259 24618