SEBI Guidelines of Taking Company Public

As I have already mentioned in my several articles that, Taking your Company Public is the final step of becoming a Billionaire. I don’t know about the guidelines about the stock exchanges worldwide but here are SEBI Guidelines of Listing a Company.

SEBI Guidelines: Taking Company Public

# - Minimum Listing Requirements for New Companies

The following eligibility criteria have been prescribed effective August 1, 2006 for listing of companies on BSE, through Initial Public Offerings (IPOs) & Follow-on Public Offerings (FPOs):

1. Companies have been classified as large cap companies and small cap companies. A large cap company is a company with a minimum issue size of Rs. 10 crore and market capitalization of not less than Rs. 25 crore. A small cap company is a company other than a large cap company.
   1. In respect of Large Cap Companies
      1. The minimum post-issue paid-up capital of the applicant company (hereinafter referred to as "the Company") shall be Rs. 3 crore; and
      2. The minimum issue size shall be Rs. 10 crore; and
      3. The minimum market capitalization of the Company shall be Rs. 25 crore (market capitalization shall be calculated by multiplying the post-issue paid-up number of equity shares with the issue price).
   2. In respect of Small Cap Companies
      1. The minimum post-issue paid-up capital of the Company shall be Rs. 3 crore; and
      2. The minimum issue size shall be Rs. 3 crore; and
      3. The minimum market capitalization of the Company shall be Rs. 5 crore (market capitalization shall be calculated by multiplying the post-issue paid-up number of equity shares with the issue price); and
      4. The minimum income/turnover of the Company shall be Rs. 3 crore in each of the preceding three 12-months period; and
      5. The minimum number of public shareholders after the issue shall be 1000.
      6. A due diligence study may be conducted by an independent team of Chartered Accountants or Merchant Bankers appointed by BSE, the cost of which will be borne by the company. The requirement of a due diligence study may be waived if a financial institution or a scheduled commercial bank has appraised the project in the preceding 12 months.

1. For all companies :
   1. In respect of the requirement of paid-up capital and market capitalization, the issuers shall be required to include in the disclaimer clause forming a part of the offer document that in the event of the market capitalization (product of issue price and the post issue number of shares) requirement of BSE not being met, the securities of the issuer would not be listed on BSE.
   2. The applicant, promoters and/or group companies, shall not be in default in compliance of the listing agreement.
   3. The above eligibility criteria would be in addition to the conditions prescribed under SEBI (Disclosure and Investor Protection) Guidelines, 2000.