For most startup founders, the idea of launching an IPO feels distant. It’s often seen as something only well-established, high-revenue businesses can pull off. If your turnover is modest and your team is lean, you might assume going public is off the table. But the truth is more layered.
In India, the IPO ecosystem has evolved. It’s no longer a one-size-fits-all path reserved for companies with ₹100 crore revenue lines and expansive infrastructure. Thanks to SME platforms like BSE SME and NSE Emerge, even early-stage businesses now have a realistic shot at accessing public capital — if they meet the right conditions.
This guide breaks down the practical side of going public with low turnover. It’s not theory. It’s a clear look at the eligibility, the process, and the mindset required.
What It Actually Means to Go Public
An Initial Public Offering — IPO — is not just a financial event. It’s a shift in identity. You go from being privately held to opening your company up to public investors. With that comes accountability, visibility, and new expectations.
For startups, this can be transformative. It means raising money without ceding too much control. It means building long-term value, not just chasing the next funding round. But it also means playing by a new rulebook.
The Myth of Turnover as a Barrier
Let’s address the elephant in the room. Is there a specific revenue threshold that you need to hit before applying for an IPO? Surprisingly, no. Not in the SME space.
While large mainboard IPOs require a history of profits and higher post-issue capital, SME IPOs are built for smaller companies. There’s no hard cutoff for annual turnover. What matters more is whether your financials are clean, your compliance is solid, and your vision is credible.
So, no — low turnover alone won’t disqualify you. But you’ll need to make up for it with structure, clarity, and a strong reason to list.
Minimum Capital Requirements: Where It Does Matter
Though turnover isn’t a make-or-break metric, capital thresholds are real. To be eligible for an SME IPO, your company should have a post-issue paid-up capital under ₹25 crore. Your net tangible assets should be at least ₹1 crore. These numbers help exchanges categorize you as an SME and determine your regulatory path.
In simpler terms: if your capital goals are aligned with SME limits — say, raising ₹5–10 crore — and you’re on stable financial ground, you’re on the right track.
What Exchanges Are Really Looking For
Exchanges aren’t just scanning your top line. They’re evaluating your overall business health. That includes your team, governance, promoter history, and why you want to go public.
They want to see a story that holds up — even if your revenue is still scaling. A startup with ₹6 crore turnover and a healthy balance sheet may be more IPO-ready than a ₹50 crore company with legal issues or weak internal controls.
Your DRHP Is More Than a Document
When preparing to list, you’ll create a Draft Red Herring Prospectus (DRHP). Don’t treat this as a formality. This is your chance to tell your story — honestly and confidently.
Why are you raising funds? What does the next chapter look like for your business? How are you planning to use the capital?
Investors reading your DRHP aren’t expecting perfection. They’re looking for honesty, preparedness, and a clear growth roadmap.
Examples That Prove the Point
Take the case of a tech-enabled logistics company from Gujarat. Their turnover was around ₹5.5 crore, but they had a solid client base and a technology stack that made deliveries more efficient in smaller towns. They raised ₹8 crore on the SME platform.
Or a bootstrapped organic product manufacturer in Tamil Nadu. Their revenue stood at ₹7 crore, but they had a direct-to-consumer channel, audited financials, and a loyal following. Their SME IPO was oversubscribed.
These companies weren’t unicorns. But they had focus, discipline, and a story that made sense to investors.
Is Your Startup Really Ready? Ask Yourself This
Have you been in business for at least three years? Are your financials audited and above board? Do you know exactly how you’d use the capital raised? Is your promoter background clean?
If you’re saying yes to most of these, low turnover shouldn’t be a deal-breaker. You might not be traditional IPO material — but that’s exactly why SME platforms exist.
The Real Question Isn’t “Can We?” — It’s “Should We?”
Going public isn’t just about eligibility. It’s about readiness. It means stepping into a space where you report to more than just your team or investors. You report to the market. It’s a responsibility — but also an opportunity.
If you’re building with intent, if your fundamentals are strong, and if you want to grow on your own terms — then yes, going public could be your most strategic move yet.
Need a Second Opinion?
At MUDS Management, we work closely with founders to assess IPO readiness and support every stage of the SME listing journey. If you’re unsure whether low turnover is holding you back — or you want clarity on the way forward — reach out.
Let’s take the guesswork out of going public.
Related Articles:
https://muds.co.in/can-your-startup-go-public-heres-what-it-really-takes-to-launch-an-ipo-in-india/
https://muds.co.in/sme-ipo-essential-guide-to-eligibility-criteria-and-listing-process/
https://muds.co.in/sme-ipo-the-fast-track-to-financial-freedom-for-your-business/
https://muds.co.in/how-to-find-the-best-ipo-consultants-in-india-for-a-successful-listing/