Mohali · Ludhiana · Serving clients across India
IPO Advisory
Advisory on listing equity shares on the Mainboard and SME platforms of NSE and BSE under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, and on obligations after listing.
Context
Preparation decides the outcome
India’s primary market has deepened considerably, with issuers drawn from a widening range of sectors and a substantial pipeline of companies awaiting launch. Investors, in turn, have become more discerning about governance, disclosure quality and the use of issue proceeds.
With listing now required within three working days of issue closure, most of the substantive work happens before filing. Eligibility, capital structure, restated financial information and the governance framework must be settled before the draft red herring prospectus is filed.
Eligibility
Entry routes under SEBI ICDR
| Route | Conditions | Allocation |
|---|---|---|
| Regulation 6(1) Mainboard, profitability | Net tangible assets of at least ₹3 crore in each of the preceding three years (not more than 50% held in monetary assets; this limit does not apply where the issue is entirely an offer for sale); average operating profit of at least ₹15 crore over the preceding three years, with operating profit in each; net worth of at least ₹1 crore in each of the preceding three years | QIB up to 50%; NII at least 15%; retail at least 35% |
| Regulation 6(2) Mainboard, institutional | For issuers not satisfying Regulation 6(1) | QIB at least 75%; NII up to 15%; retail up to 10% |
| Chapter IX SME platform | Post-issue paid-up capital up to ₹25 crore; EBITDA of at least ₹1 crore in two of the preceding three years; OFS up to 20% of issue size, and no selling shareholder may offer more than 50% of their holding; proceeds not to repay promoter or related-party loans; draft offer document open to public comment for 21 days | As per exchange norms; minimum application of two lots |
Summary only. Eligibility is determined with reference to the regulations and the lead manager’s due diligence.
Key provisions
Capital structure and lock-in
| Item | Requirement |
|---|---|
| Minimum promoter contribution | 20% of post-issue capital, locked in for 18 months from allotment; 3 years where the objects include capital expenditure for a project |
| Promoter holding above 20% | Locked in for 6 months |
| Pre-issue capital of other shareholders | Locked in for 6 months from allotment, subject to specified exemptions |
| Offer for sale | Shares offered must have been held for at least one year before filing the draft offer document, subject to specified exemptions |
| General corporate purposes | Up to 25% of gross proceeds; together with unidentified acquisitions, up to 35% |
| Anchor investors | 50% of anchor allotment locked in for 30 days and the balance for 90 days |
| Outstanding convertibles | No outstanding convertible securities other than ESOPs; fully paid-up convertibles must be converted before filing the red herring prospectus |
Scope of services
Our IPO advisory services
Readiness assessment
Review of eligibility, capital structure, financial reporting, litigation, related-party transactions and governance against ICDR and LODR requirements, with a remediation plan.
Pre-IPO restructuring
Group consolidation through schemes, transfer of businesses or intellectual property into the issuer, conversion to a public company and reverse flips.
Capital structure
Cap table review, conversion of preference shares and convertibles, ESOP alignment, promoter identification and lock-in planning.
Financial information
Support on restated consolidated financial information, KPIs disclosed in the offer document, and the statement of special tax benefits.
Corporate governance
Board composition and committees under LODR, policies for related-party transactions, materiality, insider trading and whistle-blowing.
Secretarial and legal diligence
Review of corporate records since incorporation, title to material properties, licences, material contracts and outstanding litigation.
Pre-IPO placement
Structuring of a pre-IPO round and its disclosure in the offer document.
Coordination with intermediaries
Working with SEBI-registered merchant bankers, legal counsel, statutory auditors and the registrar through the filing and observation process.
Post-listing compliance
Positioning against listed peers, selection of key performance indicators and valuation benchmarks investors will apply.
Process
Indicative IPO timeline
For a mainboard issue, typically 18 to 24 months from the readiness review. For an SME issue, typically six to nine months.
01
Readiness assessment T-24 months
Eligibility, gaps and remediation plan.
02
Restructuring and governance T-24 to T-12
Group structure, board, policies and restated financials.
03
Appointment of intermediaries T-12 to T-8
Lead managers, legal counsel, registrar and other intermediaries.
04
Due diligence and DRHP filing T-8 to T-5
Offer document drafted and filed with SEBI and the stock exchanges.
05
SEBI observations and RHP T-5 to T-1
Responses to observations; in-principle approval; red herring prospectus.
06
Issue and listing T
Anchor allocation, bid period, basis of allotment and listing on T+3.
IPO readiness assessment
A review of eligibility and gaps against SEBI ICDR and LODR requirements.