Initial Public Offering(IPO)
About IPO
As per the official estimates, there are about 63.05 million micro industries, 0.33 million small, and about 5,000 medium enterprises in the country. Since MSMEs forms such a large part of our economy, the proper functioning of such enterprises is necessary. Most of the MSMEs are dependent either on their personal finance or on Bank finance. Most MSMEs have leveraged themselves with the Bank and financial institution to the extent that the burden of the finance cost affects the growth of the company and acts as a hurdle in the company’s growth potential. To tackle this, the company shall break the stereotypes and shall look raise funds through the capital market.
An MSME company can dilute its equity and raise capital through Equity Market. Raising through equity market capital has no interest cost and the company has doesn’t have to pay any service cost for such capital. MSMEs can use the capital market to raise funds and expand their company in a cost-effective manner.
Role of Gretex in IPO
Gretex will act as Lead Manager to the issue, we are responsible to complete the entire listing process. The process can be classified as below;
1. Pre – Issue: The lead manager takes up the due diligence of the company’s operations/ management/ business plans, etc and additionally drafts as well as design offer documents, prospectus, statutory advertisements, and memorandum of association. The lead manager shall ensure compliance with the stock exchanges, RoC, and SEBI including finalization of prospectus and RoC filling.
2. Post – Issue: The lead manager also draws up various marketing strategies for the issue. Post issue activities include management of escrow accounts, dispatch of refunds, finalization of trading and dealing of instruments, Submission of final offer document with ROC / SEBI and Stock Exchanges, Completion of Issue and allotment process and Listing of Shares on Stock Exchange, etc.
SME IPO
- Time Frame of SME IPO Listing: 2-3 months
- Cost involved in SME IPO Listing: Rs. 40-50 Lakhs.
- Total SMEs in India as on (26.11.21): 2,93,555 Small Enterprises & 32,959 Medium Sized Enterprises
Mainboard IPO
- Time Frame of Mainboard IPO Listing: 6-9 months.
- Cost involved in Mainboard IPO Listing: Rs. 400-500 Lakhs.
SME IPO
As per the official estimates, there are about 63.05 million micro industries, 0.33 million small, and about 5,000 medium enterprises in the country. Since MSMEs forms such a large part of our economy, the proper functioning of such enterprises is necessary. Most of the MSMEs are dependent either on their personal finance or on Bank finance. Most MSMEs have leveraged themselves with the Bank and financial institution to the extent that the burden of the finance cost affects the growth of the company and acts as a hurdle in the company’s growth potential. To tackle this, the company shall break the stereotypes and shall look raise funds through the capital market.
An MSME company can dilute its equity and raise capital through Equity Market. Raising through equity market capital has no interest cost and the company has doesn’t have to pay any service cost for such capital. MSMEs can use the capital market to raise funds and expand their company in a cost-effective manner.
Mainboard IPO
Role of Gretex in SME IPO/Mainboard IPO
Gretex will act as Lead Manager to the issue, we are responsible to complete the entire listing process. The process can be classified as below;
1. Pre – Issue: The lead manager takes up the due diligence of the company’s operations/ management/ business plans, etc and additionally drafts as well as design offer documents, prospectus, statutory advertisements, and memorandum of association. The lead manager shall ensure compliance with the stock exchanges, RoC, and SEBI including finalization of prospectus and RoC filling.
2. Post – Issue: The lead manager also draws up various marketing strategies for the issue. Post issue activities include management of escrow accounts, dispatch of refunds, finalization of trading and dealing of instruments, Submission of final offer document with ROC / SEBI and Stock Exchanges, Completion of Issue and allotment process and Listing of Shares on Stock Exchange, etc.
Role of Gretex in IPOs
Pre-Issue:
- Checking the Eligibility Criteria.
- Due diligence of Company’s Operations, Management, Business plans, etc.
- Drafting & Designing Offer documents, Prospectus, Statutory Advertisements &Memorandum of Association (MoA).
- Ensuring compliance with BSE, NSE, RoC& SEBI along with finalization of prospectus and RoC filling.
Post–Issue:
- Marketing Strategies for the listing company.
- Management of Escrow Accounts, Dispatch of Refunds, Finalization of Trading & Dealing of Instruments.
- Submission of final Offer Document with ROC / SEBI and Stock Exchanges, Completion of Issue and Allotment Process, Listing of Shares on Stock Exchange, etc.
- Proper Handholding after listing until migration to the main board.
Process of Listing
Pre IPO Process:
- Understand capital markets
- Understand various processes involved in raising funds through IPO
- Weigh IPO option against other options of raising funds
- If IPO, check eligibility criteria of listing on that specific SME exchange, assessing your company’s readiness
- Start processes and systems to meet the requirements of a publicly listed company
- Crystallise your project and capital raising plans
- Engage a Merchant Banker & follow the IPO process further
Post IPO Process :
- Hire a Merchant Banker (MB)
- Issue Structuring of IPO in consultation with MB
- MB prepares due diligence
- MB prepares Draft Red Herring Prospectus (DRHP) with the stock exchange
- Exchange sends their representatives for site visit on company’s premises
- Exchange calls for interview with promoter & CFO of company
- Exchange gives in principle approval to MB
- MB files prospectus (RHP) with stock exchange &Registrar of Companies (ROC)
- ROC gives approval for opening up the issue
- Issue opens & investors subscribe to the issues
- Issue closes & the stock of the shares subscribed are noted
- Company gets listed on stock exchange
- After in principle approval, MB will have 1 year to open the IPO.
- Timeline for listing: max between 3 to 4 months. From the day of signing the mandate, in next four months, the company can get listed.
Benefits Of Listing
LISTING CRITERIA FOR COMPANIES
Eligibility Criteria for BSE SME, NSE Emerge and Startup
| Sr. No | Particulars | BSE SME | NSE Emerge | Startup ** |
|---|---|---|---|---|
|
1. |
Paid-up capital |
Post issue paid up capital shall
not be more than Rs. 25 crores. |
Post issue paid up capital shall not be
more than Rs. 25 crores. |
1. Post issue paid up capital shall not be more than Rs. 25 crores. 2. Rs. 1 Crore if not registered with MSME/DPIIT Else no lower limit |
|
2. |
Networth |
Positive Networth. |
— |
Positive Networth |
|
3. |
Net Tangible Asset |
It should be Rs. 1.5 Crores |
— |
— |
|
4. |
Track Record |
At least 3 Years |
At least 3 Years |
At least 2 Years |
|
5. |
Website |
Mandatory |
Mandatory |
Mandatory |
|
6. |
Dematerialization |
100% Compulsorily Demat |
100% Compulsorily Demat |
100% Compulsorily Demat |
Eligibility Criteria for Main Board Listing*
| Sr. No | Particulars | BSE | NSE |
|---|---|---|---|
|
1. |
Min. Post issue paid up |
It shall be Rs. 10 crore |
It shall not be less than Rs.10 crores. |
|
2. |
Min. Issue Size |
It shall be Rs. 10 crore |
- |
|
3. |
Min. Market Capitalization |
It shall be Rs. 25 crore |
It shall be Rs. 25 crore |
|
4. |
Track Record |
- |
The company or Promoter or partnership firm or proprietorship firm
or LLP must have track record of
min 3 years. |
Eligibility Criteria for as per ICDR 2018***
| Particulars | Guidelines |
|---|---|
|
Net Tangible Assets |
Min. Rs. 3 crore. Calculated on restated & consolidated basis, in all the last 3 full years,
of which max 50% are held in monetary assets.
|
|
Average Operating Profit |
Min. Rs. 15 crore. Calculated on restated & consolidated basis, during the last 3 years with operating profit in each of these three years. |
|
Net Worth |
Min. Rs. 1 crore in each of the last three full years. Calculated on restated & consolidated basis. |
|
If name changed |
If it changed its name within the last 1 year, min. 50% of revenue. Calculated on restated &
consolidated basis, for the last 1 full year has been earned by it from activity indicated by its new name. |
IPO Sucess Stories
| Sr. No | Name of the company | Sector | Location | Issue Price (in Rs.) | Issue Date | Issue Size (in Lacs) |
|---|---|---|---|---|---|---|
|
1. |
Veeram Ornament Limited |
Jewellery Mfg. |
Ahmedabad |
45 |
23-12-2016 |
511.65 |
|
2. |
Jash Dealmark Limited |
FMCG products |
Mumbai |
40 |
15-03-2017 |
540 |
|
3. |
Yug Décor Limited |
Plywood & Laminates |
Ahmedabad |
26 |
18-05-2017 |
288.08 |
|
4. |
Riddhi Corporate Services private Limited |
BPO |
Ahmedabad |
130 |
12-06-2017 |
1235 |
|
5. |
Dhruv Wellness Limited |
Pharmaceuticals |
Mumbai |
18 |
31-08-2017 |
501.12 |
|
6. |
A&M Febcon Limited |
Engineering Services |
Ahmedabad |
18 |
01-09-2017 |
668.16 |
|
7. |
Sagar Diamonds Limited |
Jewellery Mfg. |
Surat |
40 |
14-09-2017 |
1352.4 |
|
8. |
Siddharth Education Services Limited |
Tutorial coaching |
Mumbai |
30 |
29-09-2017 |
932.4 |
|
9. |
Kids Medical System Limited |
Health care Products |
Ahmedabad |
30 |
11-12-2017 |
600 |
|
10. |
Diggi Multitrade Limited |
Real estate |
Mumbai |
13 |
11-12-2017 |
338 |
|
11. |
Summaya Lifestyle Limited |
Garments Manufacturing |
Mumbai |
18 |
22-05-2018 |
1383.84 |
|
12. |
Debock Sales & Marketing Limited |
Agricultural Machine Mfg. |
Jaipur |
20 |
24-05-2018 |
444 |
|
13. |
Deep Polymers Limited |
Plastic Mfg. |
Gandhinagar |
40 |
08-08-2018 |
1524 |
|
14. |
Aaron Industries Limited |
Lift Mfg. |
Surat |
38 |
20-08-2018 |
477.66 |
|
15. |
Mac Hotels |
Hotel |
Goa |
24 |
19-09-2018 |
194.4 |
|
16. |
B&B Triplewall Container Limited |
Corrugated Box Mfg. |
Bangalore |
36 |
28-09-2018 |
1999.08 |
|
17. |
BCPL Railway Infrastrucure Limited |
Railway Infrastructure |
Kolkata |
35 |
05-10-2018 |
1701 |
|
18. |
Misquita Engineering Limited |
Washing Machine Component Supplier |
Goa |
27 |
23-09-2019 |
193.32 |
|
19. |
Anuroop Packaging Limited |
Corrugated Box Mfg. |
Mumbai |
13 |
08-11-2019 |
249.6 |
|
20. |
Billwin Industries Limited |
Protective Gears Mfg. |
Mumbai |
37 |
30-06-2020 |
2.46
|
|
21. |
G M Polyplast Limited |
H.I.P.S, A.B.S & P.E.T Sheets Mfg. |
Mumbai |
159 |
14-10-2020 |
8.09
|
|
22. |
Niks technology Limited |
IT Solution Services |
Mumbai |
201 |
21-03-2021 |
2.01 |
|
23. |
Markolines Traffic Controls Limited |
Highway Operation & Maintenance |
Mumbai |
78 |
15-09-2021 |
40 |
|
24. |
Platinum One Business Services Limited |
High Performance Outsourcing Company |
Mumbai |
92 |
02-09-2021 |
3.89 |
|
25. |
Clara Industries Limited |
Flexible Packaging Solutions Provider |
Uttar Pradesh |
43 |
16-12-2021 |
3.01 |
|
26. |
Goel Foods Private Limited |
Banquet & Restaurant |
Kolkata |
72 |
28-06-2022 |
721.15 |
|
27. |
Sailani Tours & Travels Ltd |
Tours & Travels |
Kolkata |
15 |
08-07-2022 |
189.6 |
|
28. |
Jayant Infratech Ltd |
Railway Infrastructure |
Bilaspur |
67 |
13-07-2022 |
619.08 |
|
29. |
B Right Real Estate Ltd |
Real Estate |
Mumbai |
153 |
13-07-2022 |
4435.78 |
|
30. |
Shantidoot Infra Services Ltd |
Infrastructure |
Patna |
81 |
19-09-2022 |
401.76 |
|
31. |
Steelman Telecom Ltd |
Telecom Towers |
Kolkata |
96 |
10-10-2022 |
2602.37 |
|
32. |
Reetech International Cargo & Courier Ltd |
Cargo Services |
Raipur |
105 |
10-10-2022 |
1170.54 |
