SME IPO eligibility: the numbers and conditions that matter

Eligibility for an SME IPO comes from two places: SEBI's ICDR Regulations and the listing criteria of the exchange you choose. This is a summary of the conditions we check first. Always confirm against the regulations and circulars in force on your filing date.

The core thresholds

1. Post-issue paid-up capital of up to ₹25 crore.
2. Track record of at least three years of operations.
3. Operating profit (EBITDA) of at least ₹1 crore from operations in at least two of the three preceding financial years — a requirement SEBI added for SME issuers in 2025.
4. Positive net worth, and on NSE Emerge, positive free cash flow to equity in at least two of the last three years.
5. A clean record for the company, promoters and directors — no debarment by SEBI and no wilful-defaulter tag.

Conditions SEBI tightened in 2025

SEBI amended the SME framework to improve the quality of issues. Among the changes:

• The offer for sale portion is capped as a share of the total issue, and selling shareholders can sell only part of their holding.
• The amount that can be raised for general corporate purposes is capped.
• Minimum application sizes were raised so that SME issues attract informed investors.
• Proceeds cannot be used to repay loans taken from promoters, the promoter group or related parties.

What usually needs fixing

In our experience the thresholds are rarely the problem. The real work is in share-capital history, related-party transactions, statutory registers and governance — which is why we begin every mandate with a compliance health check.

Try the indicative eligibility check or download the Pre-IPO checklist.