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SME IPO ON NSE OR BSE

REASONS FOR GOING TO PUBLIC THROUGH SME ISSUE Access to capital and future financing opportunities:

Capital for growth, innovation and acquisitions. Favourable terms of debt/ mezzanine finance for listed companies.

Liquidity /exit for investors:

Unlocking of shareholder wealth. Exit and Liquidity for VC/ PE/ Risk Investors. Early risk investors get tax benefits on exiting on platform.

Facilitate Acquisitions:

Shares are more efficient & cost effective currency substitute to acquire target cos. Ability to complete M&A in a more timely manner

Employee Stock Options:

ESOPs become powerful tool to attract & retain talent. Compensating employees without affecting cash flows.

Visibility/ Recognition:

Visibility on getting listed will improve customer client credibility. Conserve value and migrate to main board with more broad based IPOs.

Easier to List:

Min allottees required: 50 only can be achieved with focused marketing. Lower cost, time and effort to get listed.

100% underwriting:

100% underwriting of the issue will ensure that the issue is fully subscribed.

Alternate Valuation:

Potential based valuations could be offered by informed investors rather than benchmarking with matured large Corporates on the main board.

New class of investors:

Platform will attract new class of long term Institutional risk investors (both in primary & secondary market), interested to invest in exciting fast growing companies in India on a regulated platform.

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Migration to main Board on seasoning:

Getting listed on SME Platform will allow companies to grow to serious size, conserve value and migrate to main board with more broad based IPOs.

ADMISSION & LISTING PROCESS I. Issuer Eligibility Criterion A. Conditions Precedent to Listing The Issuers on SME platform shall have adhered to conditions precedent to listing as emerging, inter-alia, from i. Securities Contracts (Regulations) Act 1956, ii. Companies Act 1956, iii. Securities and Exchange Board of India Act 1992, iv. Any rules and/or regulations framed under foregoing statutes, as also any circular, clarifications, guidelines issued by the appropriate authority under foregoing statutes. B. Eligibility criteria for listing on SME Platform The following criteria should be complied with as on the date of filing the DRHP with Stock Exchange as well as when the RHP is filed with RoC and SEBI. II. Parameter Listing Criterion a) Incorporation - The Issuer should be a company incorporated under the Companies Act 1956, in India. b) Post Issue paid up Capital - The post issue paid up capital of the company (face value) shall not be more than Rs. 25 crore. c) Track record The company should have track record of atleast 3 years. The company should have positive cash accruals (earnings before depreciation and tax) from operations for atleast 2 financial years preceding the application and its net-worth should be positive. In cases where the issuers does not fulfill the above mentioned criteria, the matter may be referred to the Relevant Authority for a suitable decision.

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Other listing conditions The applicant Company has not been referred to Board for Industrial and Financial Reconstruction (BIFR). No petition for winding up is admitted by a Court of competent jurisdiction against the applicant Company. No material regulatory or disciplinary action by a stock exchange or regulatory authority in the past three years against the applicant company. PRELIMINARY INFORMATION REQUIRED TO PLAN SME IPO The list of the initial information / documents required for understanding the Company and its fund raising proposal 1. Brief Profile/Presentation about the Company covering the details of its o Management o Promoter(s) o Existing Shareholding Pattern 2. Brief details of the Present Business (along with Products / Services break up, Existing Manufacturing Capacities etc. if any) 3. Annual Reports of the Company for last three Audited Financial Years 4. Brief details of the Proposed Expansion Plan and Funds Requirement 5. A copy of latest Memorandum & Articles of Association 6. Financial Projections for next three Financial Years, if any available