1. Blog
  2. >
  3. Capacity
  4. >
  5. Business Growth
  6. >
  7. What is the SME...

What is the SME IPO complete guide?


Small and Medium Enterprises (SMEs) have a great scope in today’s market. SMEs are one of the major contributors to a growing economy. With the changing economy, it’s becoming crucial for every SME to think about an IPO (Initial Public Offering) with a good share price as it can provide a huge boost to the enterprise. The Indian SME sector accounted for a total gross value added (GVA) of 25.7 per cent in 2020-21, the share of the SME sector in India’s GVA was 49.5%. The size of this sector is estimated to be $6.55 billion, employing close to 123 million people. Financing these businesses is a huge challenge. And the IPO route is one of the best possible options to raise funds. Let’s understand more about SME IPO.

 What is an SME IPO?

A Small and Medium Enterprise or SME is an entrepreneur-managed business organisation, which is based in any developing country. They are smaller than large-scale businesses and are commonly referred to as the “backbone of the economy”. They are the main source of employment in the societies they are found in.

SME IPOs are usually done by companies already listed on an exchange but looking to raise additional funds. The process of going public can be costly and time-consuming, so many SMEs choose to list on a smaller exchange or use a specialised firm to help with the process.

SME IPOs can be a great way to raise capital, but they also come with risks. The most common risk is that the company may not be able to meet the expectations of the public markets and may need to delist or go private again. There is also the risk that the shares may not be attractive to investors and may not be able to generate enough demand to support the price.

Dos and Don’ts of IPO

When it comes to SME IPO in India, there are a few dos and don’ts that entrepreneurs need to keep in mind,

  • For starters, it is important to have a detailed business plan ready before approaching potential investors. This will give them a clear idea of your business goals and how you plan on achieving them.
  • It is also important to have a solid track record of financial stability and growth. Investors will want to see that your business is capable of sustaining itself in the long run.
  • On the other hand, there are a few things that you should avoid doing when it comes to SME IPO in India,
  • Do not over-promise your growth prospects. This will only lead to disappointment later and will damage your credibility in the eyes of investors.
  • Avoid using complex financial jargon in your pitch to investors. Keep it simple so that they can understand your business plan easily.
  • Do not forget your homework on regulatory requirements for SME IPOs in India. This will ensure that your process is smooth and hassle-free.

A step-by-step guide to SME IPO

The process of a small and medium enterprise (SME) initial public offering (IPO) has evolved over the years, with different approaches taken by different countries. In general, the process involves the following steps:

  • The company seeking to go public must first prepare a prospectus, which is a document that outlines the company’s business plan, financial situation, and other relevant information.
  • The prospectus must then be approved by the relevant regulatory authority.
  • Once the prospectus is approved, the company can begin marketing the IPO to potential investors.
  • The company will set a price for the shares being offered and then allocate those shares to the investors who have expressed interest.
  • Once the shares are allocated, the company will list them on a stock exchange and begin trading.

Benefits of getting your company listed in SME IPO

There are many benefits to getting your company listed in the SME IPO. Below are some,

  • It provides greater visibility for your company and can help attract new investors.
  • Listing in the SME IPO can help you raise capital more easily and at a lower cost than other methods such as private placement or venture capital.
  • Being listed in the SME IPO can help improve your company’s corporate governance and give you access to a pool of potential shareholders.

How does an SME IPO work?

An SME IPO is a type of public offering in which a small or medium-sized enterprise (SME) raises funds by selling shares to the public. This can be done through a traditional IPO, in which the SME sells shares to institutional investors such as banks and hedge funds, or through a direct listing on a stock exchange.

The funds raised through an SME IPO can be used to finance growth initiatives, including expansion, research and development, and acquisitions. An IPO can also help raise the profile of an SME, making it more attractive to customers and partners.

There are several considerations that an SME should take into account before undertaking an IPO, including the costs and regulatory requirements. The decision to go public should also be based on a realistic assessment of the company’s growth prospects and its ability to meet the demands of being a public company.

Eligibility criteria

To be eligible for an SME IPO, there are a few things you need to know first. Most importantly, you need to make sure that your business is eligible.

Your business must have a minimum turnover of Rs. 20 crores in the last fiscal year. Additionally, your business must be at least three years old and profit-making for at least two of those years.

If your business meets these criteria, you may be eligible for an SME IPO. However, it’s always best to speak to a financial advisor or IPO consultant to get expert advice on whether an IPO is right for your business.

Choosing an IPO consultant is a big decision, it will decide the future of your business, so choose wisely. Also, listing your company in an SME IPO is an important decision, you need to have enough understanding of what an IPO is, its process, and eligibility criteria. We hope with the above information, you’re clear about SME IPOs and are confident enough to proceed with the right decision.


Succeed Online With Highly Effective Business Tips and Tricks

Do you want to scale your business even further than it is today? You are at the right place.

We provide Premium Online Learning for Small to Mid-Sized Businesses.

We are MSMEx, an experienced MSME edtech company with highly qualified staff to help companies grow in their industry and attract more visitors online. Whether you are struggling to gain a competitive edge online or are working on bringing your business online, we are here to assist you.

Learn powerful tips and tricks, customized especially for your business to suit its specific needs. All you need is to create a website to get started. We will help you and your employees learn everything about the internet and how things work to bring your business to the limelight.

How MSMEx Sessions Benefit Businesses?

The sessions of MSMEx are beneficial for businesses of all kinds and scales. We help them leverage the power of the world of the internet and also solve all their queries and doubts. You get expert help, if you are ever stuck with the scalability of your business.

You may be doing great online, but it's always better to learn more about things better. Learning experiences provided by us are enjoyable and beneficial at the same time. Grow your business and soar high without limits.

MSMEx will help you connect with your audience, understand their pain points, and earn more revenue than ever you have expected.

If something is working for your competitor, it doesn't need to work for you as well. You very well know that every business is different, and so are its needs. Hence, we work closely with our clients to know and understand their processes and custom-make solutions that work out for them.

Why Learn From MSMEx Experts?

The lessons we provide to businesses are curated to match their needs, preferences, and operations. With years of experience in creating industry experts, we take pride in the services offered. Learning is a never-ending process, and with the world of the internet evolving each passing day, there is an ocean full of things you need to learn.

Discover what you can do for your business by spending half of what you are doing now. Several companies have opted for the sessions provided by our experts, and they have unlocked more significant benefits that were beyond their imagination.

We teach several aspects of business operations and how a business can do a lot more than what it is doing today. We will help you craft the roadmap of your business' success.

Why is MSMEx Different?

We conduct live sessions for businesses to understand the course content in depth. We also allow them to connect with the lecturers in case of doubts. The pillars of our company conduct interactive sessions to give valuable insights.

We also have e-books for business leaders to unlock the full potential of the world of the internet.

Learn from a team of serial entrepreneurs, business experts, and corporate professionals who have made efforts in their journey to success. We teach business owners and other aspirants the tricks to be focused on growth to drive their business forward.