SME IPO: 101 Guide with Simplified Processes

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The initial public offering of small and medium-sized businesses (SME IPO) is bringing about a paradigm change in the Indian financial markets. Businesses that keep sales, assets or a number of workers below a specific level are known as small and mid-sized companies (SMEs). Small and medium-sized businesses are defined differently in each country.

BENEFITS OF LISTING UNDER SME BOARD

  1. Improved recognition and visibility.
  2. Improved credibility with key stakeholders, including clients, partners, and staff.
  3. Equity financing offers cost- and tax-effective growth prospects including expansion, mergers, and acquisitions.
  4. A higher corporate valuation.
  5. Enables shareholders’ liquidity.

SME Eligibility in India

The Micro, Small & Medium Enterprises Development Act of 2006 states that MSMEs can be registered under the manufacturing sectors if: In the case of Micro Enterprises, the investment does not exceed INR 25,00,000. In the matter of Small Enterprises, the investment is greater than INR 25,00,000 but not greater than INR 5,00,00,000.

According to the Micro, Small & Medium Enterprises Development Act, 2006, MSMEs can be recognized under the service sectors if: The investment doesn’t exceed INR 10,00,000 in the case of Micro Enterprises. In the case of small businesses, the investment is greater than INR 10,00,000 but not greater than INR 2,00,00,000. In the case of Medium Enterprises, the investment is greater than INR 2,00,00,000 but not greater than INR 5,00,00,000.

The Indian government amended the investment threshold and added an element—annual turnover—to the definition of an MSME. According to the revised definition, MSME can be identified if: In the case of Micro Enterprises, the investment does not exceed INR 1,00,00,000 and the annual turnover does not exceed INR......