SME IPO readiness, run by a CFO who prepares the finance workstream.
Merchant bankers run the issue. Someone has to make the company listable first: three years of clean, restated financials, controls that survive due diligence, a board-grade MIS and a finance team that can keep reporting after listing. That is the fractional CFO's job, twelve to eighteen months before the DRHP.
The listing is a finance project before it is a capital-markets project.
NSE Emerge and BSE SME have made public capital available to businesses with ₹25–300 crore turnover, and SEBI has tightened the framework in response: a minimum operating profit in two of the three preceding years, limits on offers for sale and on general corporate purposes, and closer scrutiny of related-party transactions and use of proceeds. Promoters who begin with the merchant banker discover that the real work is upstream.
Audited accounts for three years that do not reconcile to the GST returns. Related-party dealings that were never documented. A promoter's personal expenses in the company. No internal audit, no audit committee, a chart of accounts that cannot produce segment numbers. Each of these costs months in the DRHP process, and some cost the listing.
We work on the company's side: a readiness diagnostic, then a sequenced plan to make the financials, controls and reporting listable, so that when the merchant banker and peer-reviewed auditor arrive, the finance workstream is already clean.
Signs you need readiness work first
- Three years of audits exist but the numbers have been reclassified between them
- Related-party purchases, rent or loans with no agreements or benchmarking
- No monthly MIS that a board would accept
- Operating profit depends on one customer or a one-off
- The merchant banker's checklist has more red than green
The finance workstream of an SME IPO.
- 01
Eligibility and readiness diagnostic
Profitability, net worth, track record and related-party position checked against the current NSE Emerge and BSE SME criteria and SEBI's ICDR regulations. A written gap list with a timeline: what must be fixed before the DRHP, what can be disclosed, and what should make you wait a year.
- 02
Financials that reconcile
Three years of accounts restated on a consistent basis, reconciled to GST, TDS and bank, with revenue recognition, inventory valuation and related-party transactions documented. Working alongside the peer-reviewed auditor the exchange requires.
- 03
Governance and controls
Audit committee and board processes, internal audit, delegation of authority, related-party policy, insider-trading and disclosure frameworks. Built to operate after listing, not just to pass the DRHP.
- 04
MIS, projections and use of proceeds
A board-grade monthly MIS, a projection model that underpins the objects of the issue, and a use-of-proceeds plan the monitoring agency can track. The finance team is trained to keep producing it quarterly once listed.
What the readiness engagement produces.
Concrete deliverables, owned by named people, on a fixed monthly fee.
Before the merchant banker
- Readiness diagnostic and gap list with timeline
- Restated three-year financials, reconciled
- Related-party register, agreements and policy
- Audit committee, internal audit and DOA set up
- Board-grade MIS running for at least two quarters
Through the DRHP
- Finance section of the DRHP and due-diligence responses
- Projection model and objects of the issue
- Working-capital statement and peer comparison
- Post-listing reporting calendar and team plan
- Coordination with banker, auditor and legal counsel
What readiness changes.
Shown as ranges across comparable, anonymised engagements. Your numbers depend on your starting point.
Timelines depend on the state of the accounts at the start. We will tell you in the diagnostic if a listing is a year too early; several promoters have been better served by a bank line or a private round first.
Related pages and tools.
SME IPO readiness: common questions
Are you a merchant banker?
No. We are the company's CFO for the process. The merchant banker structures and markets the issue; we make sure the financials, controls and MIS they are selling are real, reconciled and sustainable. We work with the banker, the peer-reviewed auditor and legal counsel you appoint, and can introduce firms we have worked alongside.
How early should readiness start?
Twelve to eighteen months before the planned DRHP. The exchanges look at three years of financials and SEBI now expects operating profit in two of the three, so the earlier the accounts are cleaned, the more of the track record counts. Two quarters of board-grade MIS before the banker is appointed is a good test.
What does an SME IPO cost the company?
Issue expenses for an SME listing commonly run 8–12% of the issue size including banker, auditor, legal, market-maker and exchange fees, higher for small issues. Readiness work is a separate monthly retainer and usually pays for itself in a cleaner valuation and a shorter DRHP cycle. We give a fixed quote after the diagnostic.
Will you stay on after listing?
Often, yes. Listed SMEs must report half-yearly and keep the governance running, and most do not have a full-time CFO at listing. A reduced retainer covering quarterly results, board packs and investor queries is the usual arrangement, until a full-time hire makes sense.
Find out if your company is listable, and when.
Book a 30-minute strategy call. We will walk through the eligibility criteria against your last three years of accounts and tell you what the readiness plan would look like.