What are the eligibility criteria for a company to issue an IPO?

A company must meet the guidelines prescribed by SEBI and the stock exchange in order to conduct an IPO.

1. SEBI IPO Eligibility Criteria (Entry Norms)

1. Profitability Route
   • Net Tangible Assets - Rs 3 crores
   • Net Worth - Rs 1 crore
   • Average Operating Profit - Rs 15 crores
   • In case of a name change, 50% of the revenue should be derived from the activity under the new name.
2. QIB Route
   • Book Building Process.
   • Allocation of 75% to QIB.
   • Refund IPO Money, if allotment criteria are not met.
   • NSE IPO Eligibility Norms (NSE IPO Requirements)

2. NSE IPO Eligibility Norms (NSE IPO Requirements)

• Annual Reports of 3 years.
• Promoter Experience of 3 years.
• No pending proceedings for Insolvency or Bankruptcy.
• No winding up notice received.
• Positive Net worth.
• Post Issue paid-up capital > Rs 10 crores.
• Market Capitalization > Rs 25 crores.

3. BSE IPO Eligibility Norms (BSE IPO Requirements)

• Post-issue paid-up capital > Rs. 10 crores.
• Issue size > Rs. 10 crores.
• Market capitalization > Rs. 25 crores.

4. Other Prerequisites for Company /Promoters/Directors/Investors

• No disciplinary action.
• Not under capital markets debarment period directly or through association with any other corporation.
• Cannot be defaulters, offenders or fugitive.
• Own at least 20% of post-IPO equity capital.