About IPO Consulting Services

IPO full form is Initial Public Offering. IPO refers to the first-ever share of a company to the general public. Many companies launch their IPOs in order to raise funds for business expansion. If you want to raise funds for your company, you can consider an IPO launch. The funds acquired by launching an IPO can be utilized by your company to purchase equipment, pay off debts, and improve the infrastructure. You can take your company to new heights.

However, launching an IPO isn’t easy. It requires a lot of paperwork and approval from SEBI. Therefore, it is important to seek professional guidance from an IPO consulting firm. Our IPO consultants at Registrationwala will not only explain the entire IPO process but also assist you throughout it, increasing your chances of getting listed. 

Types of IPOs

IPOs come in two varieties: SME IPOs and Mainboard IPOs.

• SME IPO: SME IPO full form is Small and Medium Enterprises Initial Public Offering. This IPO is launched by small to medium-sized businesses seeking to raise capital. The post-issue paid-up capital for an SME IPO cannot exceed Rs. 25 crore.
  
• Mainboard IPO: This IPO occurs when a privately owned company sells its shares to the general public for the first time and gets listed on the stock markets. Large companies with major operations and financial standing go for mainboard IPO. The post-issue paid-up capital requirement for mainboard IPO must be at least Rs. 10 crore.

Depending on the size of your company, you must go for either an SME IPO or a Mainboard IPO.

SEBI’s Eligibility Criteria for IPO Application

SEBI has set the eligibility criteria for IPO application. This eligibility criteria must be met by the applicant in order to be eligible for IPO listing on stock exchanges in India:

• The company must have been in business for at least 3 years.
• The company’s minimum net worth must be Rs. 1 crore in each of the previous three years.
• The company must have generated profits in at least 2 out of 3 most recent financial years.
• The net profit in the past 3 years must be positive. 
• The company should not have been a loan defaulter or have defaulted on overdraft from any bank/financial institution. 
• At least 25% of the company must be publicly owned and not held by promoters or any associated parties.
• Clean Audited Financial Statements for the past 3 years.
• Minimum paid-up capital of Rs. 1 crore.
• In case the company has renamed itself within the last year, at least 50% of revenue for the preceding 1 year should be from the activity suggested by the new name. 

Documents Required for IPO Registration

The applicant entity must prepare the list of the following mandatory documents for IPO registration. 

• Certificate of Incorporation/Registration
• Annual Financial Statement
• Red Herring Prospectus
• A letter of Engagement in the name of an Investment/Merchant banker
• Track records of the company directors
• Details of the Management background
• Details of Insider holdings
• Documents which shows distribution of shareholding
• Legal issues faced by the company, if any
• Ticker symbol to be used by the company once it’s listed
• Any other documents required by the regulatory authority SEBI

For assistance in the preparation of the above-mentioned documents for IPO, reach out to our Mainboard or SME IPO consultants at Registrationwala.

Steps Involved in the IPO Registration Process

The IPO process involves the following steps:

Step 1: Hiring a Merchant Bank

To begin the IPO process, the company must take assistance from financial experts, such as merchant banks and investment banks. These experts will ensure the company regarding the capital being raised and serve as intermediaries between the company and the investors. 

Additionally, they will study the company’s crucial financial parameters and sign an underwriting agreement containing details of the deal, the amount to be raised, and information regarding securities being issued. 

Step 2: Prepping up for IPO Registration 

This step involves the preparation of all the relevant documents, including the red herring prospectus. This prospectus is a mandatory document under the provisions of the Companies Act. It is a document that contains all the mandatory disclosures in accordance with SEBI and the Companies Act. 

The key components that make up red herring prospectus are: definition of industry-specific terms, business and financial descriptions, disclosure of risk factors, disclosure of how the money raised from investors will be utilized, industry segment of the company, legal information, etc. This prospectus has to be submitted to the RoC at least three days before the offer is opened to the public for bidding. Once submitted, an application can be filed for IPO with SEBI.

Step 3: SEBI’s Examination of Application and Verification of Facts

Once the IPO application has been filed, SEBI will carefully examine this application and verify the disclosure of facts by the company. If SEBI is satisfied with the application, it will be approved. After this, the date for IPO launch can be announced by the company.

Step 4: Filing an Application with the Stock Exchange

Once SEBI has given the required approval, the company must make an application with the stock exchange so that the floating of the initial issue can take place.

Step 5: Pricing of IPO through Fixed Price/Book Building Offering

Now, the company can initiate IPO pricing through fixed-price offerings or book-building offerings. In a fixed-price offering, the company stock’s price is announced in advance. 

In a book-building issue, a price range of 20% is announced, and the investors can place their bids on shares within the price bracket. Only once the bidding is closed is the final price decided. The booking is generally open for 3-5 working days, during which the investors can revise their bids within the stipulated time if they want. Once this bidding process is completed, the company determines the final price at which the issue will be sold.

Step 6: Allotment of Shares to Investors

After the finalization of IPO price, the company along with financial experts will determine the number of shares which are to be allotted to each investor. Partial allotments will be made in case the IPO is oversubscribed. Generally, the investors receive the IPO stocks within 10 working days of the last bidding date but it may take longer.

Registrationwala’s Assistance in the IPO Process

Launching an IPO can be complex and time consuming. A lot of paperwork is required. To ensure the IPO process takes place smoothly and the IPO application is filed in a correct manner, working with seasoned IPO consultants in India is crucial. 

Registrationwala provides best IPO consulting services to companies who want to launch IPOs. By allowing us to assist you in the IPO registration process, your chances of IPO approval will be increased. We will guide and assist you throughout the entire process of IPO registration and will help you to prepare all the necessary documents.

On your behalf, we will coordinate with SEBI and stock exchanges to ensure that the IPO application process is going smoothly. In case of any doubts or queries, we will be glad to assist you during the IPO process and even after your company’s IPO has been launched successfully. Don’t wait! Connect with Registrationwala and avail our impeccable IPO services now!