Difference between Main board IPO and SME IPO – Complete Details

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:

Main board IPO and SME IPO.PNG

ParameterMain Board IPOSME IPO
EligibilityEligibility norms are a bit more complex compared to SME to ensure that competent firms are given the access to stock marketEligibility norms are very relaxed when compared to regular IPO
Paid up capitalAfter 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 allotteesThere should be at least 1000 allotteesShould be at least 50 allottees
IPO Application sizeBetween Rs.5,000 – Rs.7,000.At least Rs.1,00,000
Draft Red-herring prospectus – DRHPIn a main board IPO, DRHP is filed with SEBI for vettingObservations on DRHP are done by the stock exchange itself
IPO GradingGrading of IPO by the rating agencies registered with SEBI is mandatoryGrading is not mandatory
Under writingMandatory 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 recordThree years track record of profitabilityOperating cash flows should be positive for the past two years
Market makingPost issue, market making is not mandatoryMarket making is mandatory to make the securities more liquid
Corporate governanceClause 49 of the listing agreement shall be applicableClause 49 of the listing agreement shall be applicable
Reporting requirementsQuarterly audited accounts should be submittedHalf yearly audited accounts should be submitted
FocusMain board IPO focuses more on institutional and retail investors.Focused on institutional & High net worth individuals

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