Step-by-step 2026 guide to Indian IPOs: SEBI ICDR eligibility, mainboard vs SME route, DRHP to listing timeline, and post-listing LODR obligations.
Initial Public Offerings have become a defining capital-formation route for Indian companies in FY 2026-27, with SEBI's revised disclosure norms, faster T+3 listing timelines, and increased retail participation through UPI mandates reshaping the journey. Whether you are evaluating a mainboard IPO on NSE or BSE or an SME IPO on NSE Emerge or BSE SME, understanding the process and eligibility tests is the starting point of every public-issue conversation.
Eligibility under SEBI ICDR Regulations
The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 prescribe two main eligibility routes for mainboard IPOs. The profitability route requires net tangible assets of at least ₹3 crore in each of the preceding three years, average operating profit of at least ₹15 crore in any three of the last five years, net worth of at least ₹1 crore in each of the preceding three years, and prescribed conditions on name change and existing business. The QIB route under Regulation 6(2) requires that at least 75% of the net offer be allotted to qualified institutional buyers.
SME IPO eligibility
- Post-issue paid-up capital up to ₹25 crore
- Positive net worth and operational history as per stock-exchange criteria
- Track record of distributable profits in at least two of the last three years (with platform-specific concessions)
- Underwriting of 100% of the issue, with 15% by the merchant banker
- Mandatory market making for at least three years post-listing
The IPO process step by step
- Appoint a Book Running Lead Manager (BRLM), legal counsel, registrar, and auditor
- Conduct due diligence — legal, financial, tax, secretarial and business
- Convert to a public company, reconstitute board, and adopt SEBI-compliant articles
- File Draft Red Herring Prospectus (DRHP) on the SEBI Intermediary Portal and with stock exchanges
- Respond to SEBI observations and address public comments on DRHP
- File RHP with RoC and launch the issue with anchor allocation a day before opening
- Open the issue for three to ten working days with UPI-based ASBA bidding
- Finalise basis of allotment with the registrar in coordination with the stock exchange
- Listing on T+3 from issue closure under the current accelerated timeline
Key disclosures in the offer document
The DRHP and RHP must disclose business overview, industry context, financial statements, risk factors, capital structure, objects of the issue, basis for issue price, related-party transactions, litigation, regulatory approvals, government approvals, KMP credentials, and ESG matters. SEBI's 2024 amendments require enhanced disclosures on price-band rationale, key performance indicators, and weighted-average cost of acquisition of equity over the last three years.
Post-listing obligations
Listed companies are governed by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Continuous obligations include quarterly financial results, board composition with independent directors, related-party transaction approvals, ESG reporting through Business Responsibility and Sustainability Report (BRSR), insider-trading code, and structured digital database. SME-listed entities follow a lighter — but still substantial — regime.
Common reasons SEBI raises observations
- Inadequate disclosure of related-party transactions and outstanding litigation
- Weak justification for use of issue proceeds
- Unexplained gaps between promoter background, key risks and financial trajectory
- Lack of clarity on KPIs and weighted-average cost of acquisition of equity
- Inadequate ESG and BRSR-readiness disclosures
- Open regulatory issues with sector regulators (RBI, SEBI, CCI, CBIC, CBDT)
Costs of going public
Beyond merchant banker fees (typically 1.5-3.5% of issue size for mainboard IPOs), founders should budget for legal counsel, auditor fees, registrar charges, listing fees, stock-exchange processing, SEBI fees, printing, advertising, road-show costs, and the cost of building internal SEBI LODR readiness. Total all-in IPO cost commonly works out to 6-12% of issue size depending on scale and complexity, and post-listing compliance costs continue annually.
Anchor investor allocation
Anchor investors are qualified institutional buyers who commit to subscribe before the issue opens to retail and HNI investors. SEBI permits anchor allocation a day before issue opening, with a lock-in of fifty percent of allotted shares for thirty days and the balance for ninety days. Strong anchor commitments signal market confidence and often determine the success of the public bidding window. The minimum anchor application is ₹10 crore and at least one-third of the anchor portion is reserved for domestic mutual funds.
Conclusion
An IPO is a multi-year journey, not a single event. Strengthen governance and financial reporting at least two years before the planned filing, choose between mainboard and SME platforms based on size and ambition, and partner with experienced advisors. Done right, a well-prepared IPO unlocks scalable, public capital and a permanent brand-equity lift.
