An SME IPO in India is a 13-stage journey that typically takes 18–28 months end-to-end from the point of first serious assessment. This guide walks you through every stage in plain language.
Stage 1 — Initial Diagnosis (Month 1–2)
Before investing time or money, get an honest assessment of your company's IPO readiness. Key questions: Are you legally structured correctly? Do you meet the basic financial criteria? What are your biggest gaps?
The fastest way to answer these is with an SME IPO Eligibility Calculator or a full AIRA readiness assessment.
Stage 2 — Corporate Restructuring (Month 2–6)
If your company is a Private Limited, LLP, or OPC, it must convert to a Public Limited Company. This requires:
- EGM approval of shareholders for conversion
- ROC filing for conversion (RUN-PL or relevant MCA form)
- New Certificate of Incorporation as Public Limited Company
- Updated MOA/AOA aligned with Companies Act 2013
- Amendment of all licences, GST registration, bank accounts to reflect new name/structure
Estimated time: 3–6 months if clean. Longer if promoters are NRIs, there are legacy disputes, or unusual shareholding structures.
Stage 3 — Financial Strengthening (Month 3–12)
This is the most important and often most time-consuming preparation phase. Key tasks:
- Switch to IndAS accounting if required
- Restate 3 years of financials if books have inconsistencies
- Clear all promoter loans from the company
- Document and formalise all related party transactions
- Build clean quarterly MIS reporting capability
- Ensure consistent revenue recognition policy
Stage 4 — Governance Setup (Month 4–10)
SEBI LODR requires listed companies to have:
- At least ⅓ of board as Independent Directors
- Audit Committee, NRC, SRC formed with proper charters
- Company Secretary appointed
- Board meeting minutes maintained in XBRL-compliant format
Finding the right Independent Directors early gives them time to attend board meetings and build the 12-month governance record bankers prefer.
Stage 5 — Appoint Advisors (Month 6–10)
The most important appointment is your Lead Manager (SEBI Category I Merchant Banker). They will drive the entire DRHP process. Other advisors to appoint:
- Issue Counsel (Legal Advisor) — For DRHP drafting, due diligence sign-off, SEBI observations
- Reporting Accountants (statutory auditors) — Must be a QIB-approved CA firm for SME IPOs
- Registrar to Issue (RTA) — Handles allotment, refund, demat credit
- Market Maker — Mandatory for SME exchanges, provides liquidity post-listing
Stage 6 — DRHP Drafting (Month 10–16)
The Draft Red Herring Prospectus (DRHP) is a comprehensive document of typically 200–400 pages. It covers:
- Business overview and risk factors
- 3-year audited financial statements
- Management Discussion & Analysis (MD&A)
- Use of proceeds
- Promoter background and disclosures
- Litigation disclosures
- Related party transactions
DRHP drafting takes 8–16 weeks depending on the quality of available company documents.
Stage 7 — Exchange/SEBI Filing (Month 16–20)
For SME IPOs, the DRHP is filed directly with the exchange (BSE SME or NSE Emerge). The exchange reviews and provides in-principle approval, typically within 30–45 days. SEBI provides general comments but the primary regulator for SME IPO filings is the exchange itself.
Stage 8 — Roadshow & Subscription (Month 20–22)
After exchange approval, the company does investor roadshows — typically 2–3 weeks. The IPO then opens for subscription for 3 days.
Stage 9 — Allotment & Listing (Month 22–24)
After subscription closes: basis of allotment is finalised, shares are allotted, refunds processed, and shares credited to demat accounts — all within T+6 days. Listing on the exchange typically happens within 6 working days of issue closure.