Offer Documents
SME IPO offer documents (DRHP, RHP and Final Prospectus) serve as a comprehensive disclosure tool for investors and regulators, and from a company’s perspective.
Planning an SME IPO?
End-to-end support from preparation to listing.
Planning an SME IPO?
For small and medium enterprises (SMEs) looking to raise capital through an Initial Public Offering (IPO), the preparation of offer documents is a critical step. It is crucial for the company to understand the structure, components, and regulatory requirements of these documents to ensure a successful listing.
SME IPO offer documents serve as a comprehensive disclosure tool for investors and regulators, and from a company’s perspective, they must be meticulously prepared to reflect transparency, compliance, and value proposition.
Before we run through the components and regulatory requirements of the SME IPO offer documents, let us first have a look at the list of primary offer documents required for an SME IPO:
The DRHP (Draft Red Herring Prospectus) is a preliminary document filed with the exchange. It contains details about the company, financials, risks, management, and business operations.
It does not include the exact issue structure details.It allows potential investors to analyse the company before the final IPO details are released. The DRHP is subject to review and approval by the stock exchange.
SME IPO RHP is the updated version of the DRHP after incorporating stock exchange comments and final issue details. It includes all the details of the IPO, such as the IPO dates, the issue price (in case of fixed price issues), and other confirmed information. It's the official document used to market the IPO to potential investors.
SME IPO abridged prospectus is a concise summary of the full prospectus, containing all the salient features as specified by SEBI. It provides investors with a quick overview of the company and the IPO, making it easier for them to make informed decisions. An abridged prospectus must accompany application forms for applying to the IPO.
An addendum to the DRHP is a supplementary document issued by a company after filing the original Draft Red Herring Prospectus (DRHP) with the stock exchange, to update or correct information, disclose new material developments, or respond to regulator/investor queries.
From the company’s viewpoint, it is an extension of the disclosure process and a critical compliance tool to ensure transparency and avoid legal risks.
SME IPO prospectus is the post issue version of RHP with the final issue price and allotment details. It includes the final and legally binding details of the offer.
The final prospectus is filed with the registrar of companies (ROC) and is generally used for compliance and post issue references.
SME IPO offer documents serves multiple purposes as listed below :
The structure and content of an SME IPO offer document are guided by the regulations set forth by the Securities and Exchange Board of India (SEBI) and the relevant stock exchanges (BSE SME, NSE Emerge). While specific requirements may evolve, the core components typically include:
Section |
Key Information Provided |
|---|---|
|
Front Cover & Disclaimer |
Company name, IPO size, price band (if any), important warnings about investor due diligence. |
|
Risk Factors |
Potential risks of investing, categorized by business, industry, and the IPO itself. |
|
General Information |
IPO overview, objectives of raising funds, how the money will be used, IPO schedule, details of involved parties (merchant banker, etc.). |
|
Capital Structure |
Current and future shareholding, promoter stake, any reserved portions for specific investor categories. |
|
Company Information |
Company history, business model, products/services, manufacturing details, strengths, weaknesses, competition. |
|
Industry Overview |
Analysis of the company's industry: size, growth, trends, regulations, competitive landscape. |
|
Promoters & Management |
Background, experience, and expertise of the promoters and key management team. |
|
Financial Information |
Past financial performance (balance sheet, profit & loss, cash flow), key financial ratios, management's analysis of the financials. |
|
Objects & Use of Proceeds |
Specific reasons for the IPO and a detailed plan of how the raised funds will be utilized. |
|
Legal & Regulatory Info |
Details of ongoing legal cases, important contracts, regulatory approvals, and other statutory disclosures. |
|
Offer Details |
Number of shares offered, price or price band, where the shares will be listed, application process, and how shares will be allocated. |
|
Other Information |
Details on related party transactions, intellectual property, and any other significant information. |
A well drafted offer document strategically benefits the company in following ways :
Ready to list?
Let's make it happen!
For SMEs, the offer document is more than just a regulatory formality—it is a strategic business document. It is an opportunity to define its growth story, build trust, and establish itself as a credible player in the capital markets. A well-prepared offer document not only facilitates a successful IPO but also sets the stage for sustainable public market performance.
The stock exchange approves the offer documents for the SME IPO.
For listing on NSE Emerge, NSE approves the offer documents and for listing on BSE SME, BSE approves the offer documents.