{"id":5170,"date":"2022-07-01T12:06:00","date_gmt":"2022-07-01T12:06:00","guid":{"rendered":"https:\/\/blog.researchandranking.com\/?p=5170"},"modified":"2025-11-10T13:30:53","modified_gmt":"2025-11-10T08:00:53","slug":"difference-between-mainline-sme-ipos","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/difference-between-mainline-sme-ipos\/","title":{"rendered":"Difference Between Mainline IPOs and SME IPOs"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div>\n<h2 class=\"wp-block-heading has-large-font-size\"><strong>Introduction<\/strong><\/h2>\n\n\n\n<p>When companies seek to raise capital for growth and expansion, they turn to the <a href=\"https:\/\/www.equentis.com\/blog\/what-is-stock-market-and-how-it-works\/\">stock market<\/a> through <strong>Initial Public Offerings (IPOs)<\/strong>. An IPO is the process by which a <strong>private company becomes publicly traded<\/strong> by issuing shares to investors. IPOs allow businesses to access public funds, enhance visibility, and provide liquidity to existing shareholders.<\/p>\n\n\n\n<p>India has seen an <strong>unprecedented rise in <a class=\"wpil_keyword_link\" href=\"https:\/\/www.equentis.com\/ipos\" title=\"IPO\" link=\"linked\" id=\"241\">IPO<\/a> activity<\/strong> in recent years, with both <strong>Mainline IPOs and Small and Medium Enterprise (SME) IPOs<\/strong> playing a crucial role in the financial ecosystem. Understanding the <strong>difference between <a class=\"wpil_keyword_link\" href=\"https:\/\/www.equentis.com\/ipos\" title=\"IPO\" link=\"linked\" id=\"311\">IPO<\/a> and SME IPO<\/strong> is essential for investors looking to participate in new stock market opportunities.<\/p>\n\n\n\n<p>This article provides an in-depth analysis of <strong>Mainline IPOs and SME IPOs<\/strong>, highlighting their key characteristics, investment processes, and how they impact the stock market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\"><strong>What Are Mainline IPOs?<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Definition and Characteristics of Mainline IPOs<\/strong><\/h3>\n\n\n\n<p>A <strong>Mainline <a class=\"wpil_keyword_link\" href=\"https:\/\/www.equentis.com\/ipos\" title=\"IPO\" link=\"linked\" id=\"829\">IPO<\/a><\/strong> refers to a public offering made by large and well-established companies looking to list their shares on <strong>major stock exchanges<\/strong> such as the <strong>National <a href=\"https:\/\/www.equentis.com\/blog\/what-is-a-stock-exchange-types-definition-explanation\/\">Stock Exchange<\/a> (<a href=\"https:\/\/www.equentis.com\/blog\/national-stock-exchange-of-india-functions-features-and-top-companies\/\">NSE<\/a>)<\/strong> and the <strong>Bombay <a href=\"https:\/\/www.equentis.com\/blog\/reading-stock-charts-the-basics\/\">Stock Exchange<\/a> (<a href=\"https:\/\/www.equentis.com\/blog\/explore-bombay-stock-exchange-what-is-bse-advantages-of-listing-and-investment-methods\/\">BSE<\/a>)<\/strong>. These IPOs typically involve companies with <strong>high revenue generation and strong financials<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Eligibility Criteria for Companies Opting for Mainline IPOs<\/strong><\/h3>\n\n\n\n<p>To qualify for a <strong>Mainline <a class=\"wpil_keyword_link\" href=\"https:\/\/www.equentis.com\/ipos\" title=\"IPO\" link=\"linked\" id=\"585\">IPO<\/a><\/strong>, companies must meet the following criteria:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Minimum post-IPO paid-up capital:<\/strong> \u20b910 crores or more.<\/li>\n\n\n\n<li><strong>Profitability Requirement:<\/strong> A minimum net tangible asset value of \u20b93 crores in the last 3 years.<\/li>\n\n\n\n<li><strong>Minimum Net Worth:<\/strong> \u20b91 crore in the last three years.<\/li>\n\n\n\n<li><strong>Regulatory Compliance:<\/strong> Approval from the <strong><a href=\"https:\/\/www.equentis.com\/blog\/what-does-sebi-mean-for-indian-investors\/\">Securities and Exchange Board of India<\/a> (<a href=\"https:\/\/www.equentis.com\/blog\/sebi-registered-investment-advisor-meaning-eligibility\/\">SEBI<\/a>)<\/strong> before going public.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Investor Categories and Allotment Process in Mainline IPOs<\/strong><\/h3>\n\n\n\n<p>Mainline IPOs offer shares to three broad categories of investors:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Retail Individual Investors (RIIs):<\/strong> Investors applying for <strong>less than \u20b92 lakhs worth of shares<\/strong>.<\/li>\n\n\n\n<li><strong>Non-Institutional Investors (NIIs):<\/strong> High-net-worth individuals (HNIs) applying for shares <strong>above \u20b92 lakhs<\/strong>.<\/li>\n\n\n\n<li><strong>Qualified Institutional Buyers (QIBs):<\/strong> Large institutional investors like <a href=\"https:\/\/www.equentis.com\/blog\/what-are-mutual-funds-a-comprehensive-guide\/\">mutual funds<\/a>, banks, and foreign portfolio investors.<\/li>\n<\/ol>\n\n\n\n<p>The allotment process is transparent and conducted through the <strong>book-building method<\/strong> or the <strong>fixed price method<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\"><strong>What Are SME IPOs?<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Definition and Purpose for Small and Medium Enterprises<\/strong><\/h3>\n\n\n\n<p><strong>SME IPOs<\/strong> are designed for <strong>Small and Medium Enterprises (SMEs)<\/strong> looking to raise capital from the public. These IPOs provide growing businesses with an opportunity to access public funds while being <strong>subject to relaxed compliance norms<\/strong> compared to Mainline IPOs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Key Features of SME IPOs and Their Unique Benefits<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Minimum post-IPO paid-up capital:<\/strong> Between \u20b91 crore and \u20b925 crores.<\/li>\n\n\n\n<li><strong>Lower Listing Requirements:<\/strong> SMEs are not required to show continuous profitability.<\/li>\n\n\n\n<li><strong>Higher Retail Participation Costs:<\/strong> Minimum lot size starts at \u20b91 lakh per application.<\/li>\n\n\n\n<li><strong>Lower Compliance Burden:<\/strong> Simplified reporting norms compared to Mainline IPOs.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Regulatory Framework Governing SME IPOs in India<\/strong><\/h3>\n\n\n\n<p>SME IPOs are regulated by the <strong>SEBI<\/strong> but are approved by the respective stock exchanges:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>NSE Emerge<\/strong> \u2013 SME listing platform of <strong>National Stock Exchange<\/strong>.<\/li>\n\n\n\n<li><strong>BSE SME<\/strong> \u2013 SME listing platform of <strong>Bombay Stock Exchange<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p>These platforms ensure that SMEs can raise capital with less stringent regulatory restrictions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\"><strong>Difference Between Mainline IPO and SME IPO<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Feature<\/strong><\/td><td><strong>Mainline <a class=\"wpil_keyword_link\" href=\"https:\/\/www.equentis.com\/researchandranking\/ipos\"   title=\"IPO\" data-wpil-keyword-link=\"linked\"  data-wpil-monitor-id=\"958\">IPO<\/a><\/strong><\/td><td><strong>SME IPO<\/strong><\/td><\/tr><tr><td><strong>Eligibility<\/strong><\/td><td>Post-IPO paid-up capital \u20b910 crore or more<\/td><td>Post-IPO paid-up capital between \u20b91 crore and \u20b925 crore<\/td><\/tr><tr><td><strong>Stock Exchange<\/strong><\/td><td>NSE, BSE<\/td><td>NSE Emerge, BSE SME<\/td><\/tr><tr><td><strong>Regulatory Authority<\/strong><\/td><td>SEBI approval required<\/td><td>Exchange approval required<\/td><\/tr><tr><td><strong>Profitability Requirement<\/strong><\/td><td>Three years of profitability required<\/td><td>No strict profitability requirement<\/td><\/tr><tr><td><strong>Minimum Investment Lot<\/strong><\/td><td>\u20b910,000 &#8211; \u20b915,000<\/td><td>\u20b91 lakh or more<\/td><\/tr><tr><td><strong>Allotment Norms<\/strong><\/td><td>Shares must be allotted to at least 1,000 subscribers<\/td><td>Minimum 50 subscribers required<\/td><\/tr><tr><td><strong>Underwriting Requirement<\/strong><\/td><td>Not mandatory<\/td><td>Mandatory (15% underwritten by merchant bankers)<\/td><\/tr><tr><td><strong>Target Investors<\/strong><\/td><td>Large retail participation<\/td><td>Institutional investors and HNIs<\/td><\/tr><tr><td><strong>Compliance Burden<\/strong><\/td><td>High<\/td><td>Relatively low<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\"><strong>How to Invest in SME and Mainline IPOs<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Steps to Apply for IPOs Through ASBA or Broker Platforms<\/strong><\/h3>\n\n\n\n<p>Both <strong>Mainline IPOs and SME IPOs<\/strong> can be applied for through the <strong>ASBA (Application Supported by Blocked Amount)<\/strong> facility provided by banks and brokers.<\/p>\n\n\n\n<p><strong>Steps to Apply:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Select the IPO:<\/strong> Choose a Mainline or SME IPO you want to invest in.<\/li>\n\n\n\n<li><strong>Use ASBA Facility:<\/strong> Log in to your <strong>bank account<\/strong> or <strong>broker platform<\/strong> to apply.<\/li>\n\n\n\n<li><strong>Enter Details:<\/strong> Specify the <strong>lot size<\/strong> and <strong>bid price<\/strong> (for book-building IPOs).<\/li>\n\n\n\n<li><strong>Funds Blocked:<\/strong> Your bank will block the application amount until allotment.<\/li>\n\n\n\n<li><strong>Allotment and Listing:<\/strong> If you receive allotment, the shares will be credited to your <strong>Demat account<\/strong> on the listing day.<\/li>\n<\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Key Documents and Accounts Needed for Application<\/strong><\/h3>\n\n\n\n<p>To apply for an IPO, you need:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>PAN Card<\/strong> (Mandatory for IPO applications).<\/li>\n\n\n\n<li><strong>Demat Account<\/strong> for holding shares post-allotment.<\/li>\n\n\n\n<li><strong>Bank Account<\/strong> with ASBA facility enabled.<\/li>\n\n\n\n<li><strong>UPI ID<\/strong> (For retail investors applying through brokers).<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Importance of Analyzing IPO Prospectuses<\/strong><\/h3>\n\n\n\n<p>Before investing in any IPO, always review the <strong>Red Herring Prospectus (RHP)<\/strong> to understand:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Company Financials<\/strong> (Revenue, Profitability, Debt).<\/li>\n\n\n\n<li><strong>Future Growth Plans<\/strong> (Business Expansion Strategy).<\/li>\n\n\n\n<li><strong>Industry Trends and Risks<\/strong> (Market Demand, Competition).<\/li>\n<\/ul>\n\n\n\n<p class=\"has-ast-global-color-0-color has-secondary-background-color has-text-color has-background has-link-color wp-elements-4dda291f61ac4403c89e96bc74c99ebb\"><strong>Know more about:<br><a href=\"https:\/\/www.equentis.com\/ipos\">IPOs<\/a>&nbsp;|&nbsp;<a href=\"https:\/\/www.equentis.com\/ipos\/current-new-ipos\">Current IPOs<\/a><a href=\"https:\/\/www.equentis.com\/ipos\/current-new-ipos\">&nbsp;<\/a>|&nbsp;<a href=\"https:\/\/www.equentis.com\/ipos\/upcoming-ipos\">Upcoming IPOs <\/a>|&nbsp;<a href=\"https:\/\/www.equentis.com\/ipos\/listed-ipos\">Listed IPO<\/a>s | <a href=\"https:\/\/www.equentis.com\/ipos\/current-new-ipos\">Closed IPOs<\/a> | <a data-wpil=\"url\" href=\"https:\/\/www.equentis.com\/ipos\/ipo-performers\">IPO Performers<\/a><\/strong><\/p>\n\n\n\n<p>Also Read:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.equentis.com\/ipos\/current-new-ipos\">Current IPOs<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.equentis.com\/ipos\/current-new-ipos\">Closed IPOs<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.equentis.com\/ipos\/upcoming-ipos\">Upcoming IPOs<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.equentis.com\/ipos\/listed-ipos\">Listed IPOs<\/a><\/li>\n\n\n\n<li><a data-wpil=\"url\" href=\"https:\/\/www.equentis.com\/ipos\/ipo-performers\">IPO Performers<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Introduction When companies seek to raise capital for growth and expansion, they turn to the stock market through Initial Public [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":5171,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center 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