SME IPOs are open to all categories of investors, subject to SEBI and exchange regulations. The main participants are:
- Individual Investors
- Must apply for a minimum of 2 lots (as per SEBI’s revised rules effective 1 July 2025).
- Applications for 3 lots or more are classified under the Non-Institutional Investor (NII) category.
- NRIs and HUFs can also apply under this category.
- Non-Institutional Investors (NIIs)
- Includes HNIs, resident Indians, NRIs, HUFs, companies, and trusts.
- Applications above the individual investor threshold (3 lots and more) fall here.
- Qualified Institutional Buyers (QIBs)
- Includes mutual funds, foreign portfolio investors, banks, insurance companies, pension funds, and other SEBI-registered institutional investors.
- In SME IPOs, QIBs may also participate under the anchor quota, with a minimum investment of ₹2 crores.
- Employees and Existing Shareholders (if applicable)
- Some SME IPOs also carve out a small reservation quota for employees or existing shareholders of the company or its group.
- This is optional and varies case-to-case, depending on the company’s structure and SEBI/exchange approval.
