For many founders, the idea of listing on a stock exchange is both exciting and overwhelming. On one hand, it’s the milestone that proves your business has grown up. On the other, it’s a process filled with financial thresholds, legal checks, and technical eligibility criteria that can feel like a maze.
Let’s be honest — figuring out if your company is even eligible to go public can raise more questions than answers. What’s the minimum turnover required for IPO? How many shareholders do you need? What if you’re a growing startup, not a cash-rich corporation?
This blog breaks it down simply. No jargon. No legalese. Just a clear, founder-first guide to help you understand the criteria for listing a company in stock exchange — whether you’re eyeing the SME platform or the mainboard.
First, What Does Listing Actually Mean?
Listing your company means offering your shares to the public through a stock exchange — like NSE or BSE — so that investors can buy and sell them. You move from private capital to public capital. From pitching to VCs to being evaluated by market sentiment.
But not every company can list. Exchanges have criteria in place to protect investors and ensure only stable, credible companies go public. These criteria differ slightly for mainboard and SME listings — so knowing your route is step one.
SME vs Mainboard: Two Very Different Journeys
Think of it like this — if the mainboard is a national highway, the SME platform is a fast-growing, well-paved road for smaller players who want to scale without getting run over by heavyweights.
SME IPOs are meant for small and medium enterprises who are ready to grow but may not meet the stricter financial benchmarks of the mainboard.
Mainboard IPOs, on the other hand, require more maturity — in terms of capital, profits, shareholder base, and governance.
Let’s look at what each path demands.
SME IPO Eligibility: Designed for Growing Companies
The SME exchange was built to support businesses like yours — strong on fundamentals, but not yet in the ₹100-crore club. Still, there are non-negotiable requirements you need to meet.
1. Minimum Net Worth
Your company must have net tangible assets of at least ₹1 crore, excluding revalued assets. This is to ensure there’s enough financial depth behind the brand — not just a name and a website.
2. Operational Track Record
You’re expected to have been in business for at least three years. Profitability in two of the last three years is ideal, but if your company has a net worth of ₹5 crore or more, that rule can sometimes be relaxed.
This isn’t about perfection — it’s about stability. Exchanges want to see that you’re more than an experiment.
3. Minimum Turnover Required for IPO
There isn’t a fixed turnover cut-off, but in practice, exchanges look for companies with turnovers in the ₹10–25 crore range, especially over the last year or two.
What’s more important than the number is your growth story. A smaller turnover with strong year-on-year improvement and a clear vision often inspires more investor confidence than a larger number with no direction.
4. Capital Limits
Your post-issue paid-up capital (i.e., after raising funds from the IPO) must be below ₹25 crore. If it crosses that mark, you’re no longer eligible for SME — and must apply to the mainboard instead.
It’s a sweet spot: big enough to attract investors, small enough to qualify for a less regulatory-heavy listing route.
5. Public Shareholding
At least 25% of the post-issue shareholding must be with the public. And you’ll need at least 50–100 shareholders to meet liquidity requirements.
This ensures there’s enough trading activity in your shares — not just a handful of insiders holding onto everything.
6. Clean Promoter Record
This is taken seriously. Promoters must not have any history of:
- Fraud or default
- Regulatory action
- Ongoing major litigation
You’re not just taking your company public — you’re putting your leadership team under a microscope. Transparency is non-negotiable.
7. Market Maker Requirement
This is unique to SME listings. You must appoint a market maker who agrees to buy and sell your shares regularly to ensure liquidity — especially in the early days when investor activity might be lower.
It’s one of those behind-the-scenes roles that makes your IPO function smoothly after listing.
Mainboard IPO Eligibility: For Companies Ready to Scale Nationally
If your business is larger, more structured, and already hitting higher financial benchmarks, the mainboard might be a better fit. But the bar is higher.
1. Paid-Up Capital and Net Worth
Your post-issue paid-up capital must be at least ₹10 crore. You should also have:
- Net tangible assets of ₹3 crore or more
- A profit track record for three of the last five years
This shows long-term viability — not just a temporary upswing.
2. Shareholder Base
You’ll need at least 1,000 public shareholders after the IPO. This ensures enough distribution and trading activity on Day 1.
3. Broader Governance Norms
Mainboard companies must:
- Appoint independent directors
- Form audit, nomination, and remuneration committees
- Comply with quarterly disclosure and reporting requirements
This is where the listing gets real. You’re no longer just building — you’re being watched.
Not Quite There Yet? Here’s What You Can Do
Many promising companies fall just short of one or two criteria. That doesn’t mean the IPO dream is over — it just means it’s time to prepare more strategically.
Here’s where to focus:
- Build up your net worth: Reinvest profits, trim unnecessary costs, and focus on healthy growth.
- Stabilize your operations: Document your processes, clean up financials, and ensure your filings are up to date.
- Start acting like a listed company: Form a board. Improve governance. Think investor-first, even if you’re not public yet.
This kind of prep doesn’t just help with eligibility — it creates long-term value.
SME vs Mainboard: Which One is Right for You?
| Criteria | SME Platform | Mainboard Exchange |
|---|---|---|
| Paid-up Capital | Below ₹25 crore (post-issue) | ₹10 crore and above |
| Track Record | 3 years operation, profits in 2 of 3 years | 3 years profit out of 5 |
| Net Worth | ₹1 crore minimum | ₹3 crore minimum |
| Shareholders Required | 50–100 | 1,000+ |
| Governance Requirements | Moderate | Extensive (SEBI listing norms) |
| Ideal for | SMEs, early-stage profitable businesses | Established, nationwide businesses |
Still unsure? Work backwards. Ask yourself — who is your target investor? How big a round are you planning to raise? What level of compliance are you ready for? Your answers will help define your route.
Beyond Eligibility: The Human Side of Listing
It’s easy to get caught up in the numbers. But listing your company is more than hitting financial targets — it’s about showing the world you’re ready for the spotlight.
Public investors don’t just look at balance sheets. They invest in vision, integrity, and leadership. They back founders who are honest about where they are — and clear about where they’re going.
So while you’re reviewing turnover and shareholder stats, also ask yourself:
- Are we telling a compelling story?
- Are we ready to be transparent, consistently?
- Are we building systems that can scale — not just survive?
Because in the end, eligibility isn’t just a filter — it’s a mirror.
Final Word: More Than Just Numbers
The criteria for listing a company in stock exchange aren’t there to exclude you — they exist to make sure the companies that go public are ready for it. Financially. Structurally. Culturally.
Yes, you’ll need to meet the minimum turnover required for IPO. Yes, your SME IPO eligibility must check out on paper. But if your mindset isn’t ready — it’ll show.
And if you are ready? Don’t let the paperwork hold you back. Because the right preparation, the right guidance, and the right team can turn this from an idea into your company’s biggest leap forward.
Ready to explore your IPO journey?
At MUDS Management, we help founders like you prepare, plan, and pass every step of the listing process — from eligibility to exchange.
Let’s make going public simple, structured, and founder-first.
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