Difference between Main board IPO and SME IPO, check out complete details for what is Main board IPO and what is SME IPO. Check Key differences between Main board (regular) IPO and SME IPO from below…
Main board IPO:
Initial public offer is the 1st time invitation by the company to the public offering its securities for subscription. This is the regular IPO that we hear on the day to day financial dailies.
SME IPO:
This is a separate platform designed and implemented by National stock exchange and Bombay stock exchange exclusively for the small and medium enterprises to list their securities on the stock exchange and procure capital from the investors.
Key differences between Main board (regular) IPO and SME IPO:
| Parameter | Main Board IPO | Main Board IPO |
|---|---|---|
| Eligibility | Eligibility norms are a bit more complex compared to SME to ensure that competent firms are given the access to stock market | Eligibility norms are very relaxed when compared to regular IPO |
| Paid up capital | After issue the face value of the paid up capital should be Rs.10 crores at least. | Post issue, paid up capital should not exceed Rs. 25 crores. |
| Minimum number of allottees | There should be at least 1000 allottees | Should be at least 50 allottees |
| IPO Application size | Between Rs.5,000 – Rs.7,000. | At least Rs.1,00,000 |
| Draft Red-herring prospectus – DRHP | In a main board IPO, DRHP is filed with SEBI for vetting | Observations on DRHP are done by the stock exchange itself |
| IPO Grading | Grading of IPO by the rating agencies registered with SEBI is mandatory | Grading is not mandatory |
| Under writing | Mandatory except in the cases where 50% of the total issue is offered for compulsory subscription by Qualified institutional buyers (QIB) | IPO is underwritten 100% with 15% being on the books of merchant bankers |
| Track record | Three years track record of profitability | Operating cash flows should be positive for the past two years |
| Market making | Post issue, market making is not mandatory | Market making is mandatory to make the securities more liquid |
| Corporate governance | Clause 49 of the listing agreement shall be applicable | Clause 49 of the listing agreement shall be applicable |
| Reporting requirements | Quarterly audited accounts should be submitted | Half yearly audited accounts should be submitted |
| Focus | Main board IPO focuses more on institutional and retail investors. | Focused on institutional & High net worth individuals |
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