Mainboard IPO vs SME IPO: Key Differences

A Mainboard IPO refers to an initial public offering by a company that meets the eligibility requirements of the main stock exchanges, such as the NSE or BSE. These offerings are typically associated with larger issue sizes and are subject to comprehensive regulatory and disclosure requirements.

Key Features:

• Minimum post-issue paid-up capital: ₹10 crore or more

• Listed on the main exchanges (NSE and BSE)

• Offer documents reviewed by SEBI under the ICDR Regulations

• Subject to periodic financial reporting and disclosure norms

An SME IPO is an initial public offering by a small or medium enterprise that is listed on dedicated SME platforms such as NSE Emerge or BSE SME. These offerings operate under a separate regulatory framework designed for smaller issuers.

Key Features:

• Post-issue paid-up capital between ₹1 crore and ₹25 crore

• Listed on NSE Emerge or BSE SME platforms

• Offer documents reviewed by the stock exchange rather than SEBI

• Mandatory appointment of a market maker to support liquidity

The eligibility framework for Mainboard IPOs and SME IPOs varies in terms of company size, financial thresholds, and compliance requirements. These criteria determine whether an issuer qualifies for listing on the main exchanges or on dedicated SME platforms.

Mainboard IPO Eligibility

Companies seeking a Mainboard IPO on NSE or BSE are required to meet stricter financial and operational benchmarks prescribed under SEBI’s ICDR Regulations. Common eligibility aspects include:

• Post-issue paid-up capital of at least ₹10 crore

• Track record of profitability or net worth, depending on the chosen eligibility route

• Minimum net tangible assets over preceding financial years

• Compliance with detailed disclosure, governance, and reporting standards

These requirements are designed to accommodate larger, more established companies with broader investor participation.

SME IPO Eligibility

SME IPOs are structured for smaller companies and are listed on platforms such as NSE Emerge and BSE SME. Eligibility norms are comparatively lighter and typically include:

• Post-issue paid-up capital generally between ₹1 crore and ₹25 crore

• Shorter operating or financial history requirements, subject to exchange rules

• Mandatory market maker appointment to support post-listing liquidity

• Simplified disclosure norms compared to Mainboard IPOs

These criteria enable smaller enterprises to access capital markets while operating within a scaled regulatory framework.

Overall, eligibility conditions play a defining role in determining the appropriate listing platform, as they align a company’s size, financial profile, and compliance capacity with the structure of the public market it enters.

Participation in SME IPOs is subject to eligibility norms and higher application sizes compared to mainboard IPOs. These offerings generally see participation from retail investors, high-net-worth individuals, and non-institutional investors.

Associated Market Characteristics

• Larger minimum lot sizes

• Lower trading volumes compared to mainboard stocks

• Limited analyst coverage and publicly available research

SME IPOs operate in a market segment with certain structural characteristics:

• Lower liquidity relative to mainboard-listed securities

• Financial performance may show higher variability due to business scale

• Limited third-party research coverage compared to large-cap companies

In India, companies initially listed on SME platforms, such as NSE Emerge can transition to the Mainboard of recognised stock exchanges after complying with prescribed financial, operational, and regulatory criteria set by the exchanges and SEBI.

For example, Beta Drugs Limited received approval from the National Stock Exchange to migrate its equity shares from the NSE Emerge platform to the Mainboard, with the transition effective from late November 2025. This migration follows formal application and fulfilment of Mainboard eligibility criteria, illustrating the pathway available for eligible SME-listed firms to shift to broader exchange segments.

Mainboard IPOs and SME IPOs operate under distinct regulatory frameworks, listing platforms, and participation structures. The difference between mainboard and SME IPOs lies in factors such as company size, disclosure requirements, liquidity conditions, and investor eligibility. Understanding these structural distinctions provides clarity on how each segment functions within India’s primary market framework.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.