What’s the Difference Between an SME IPO and a General IPO?
An IPO (Initial Public Offering) is when a company raises money by issuing shares to the public. In India, IPOs are categorised into two broad types: SME IPOs (for small and medium-sized enterprises) and mainboard IPOs (for larger, established companies).
The main difference lies in the company size, the platform where they are listed, and the investment requirements.
SME IPOs (Small & Medium Enterprise IPOs)
- Purpose: Designed for small and medium businesses to raise funds for growth.
- Listing platforms: NSE Emerge and BSE SME (dedicated SME exchanges).
- Issue size: Typically smaller than mainboard IPOs.
- Regulations: Relaxed compliance and disclosure requirements compared to large corporations.
- Investor eligibility: Open to retail, HNI, and institutional investors, but the minimum application size is usually higher.
- Liquidity: Post-listing trading volumes may be lower than mainboard IPOs.
Mainboard IPOs
- Purpose: Targeted at larger companies raising significant public capital.
- Listing platforms: NSE and BSE main exchanges.
- Issue size: Larger public offerings with higher visibility.
- Regulations: Stricter SEBI norms with detailed disclosures and compliance.
- Investor eligibility: Open to retail, HNI, and institutional investors with a lower minimum application size compared to SME IPOs.
- Liquidity: Tend to have higher trading volumes and analyst coverage.
SME IPOs vs Mainboard IPOs
| Feature | SME IPOs | Mainboard IPOs |
|---|
| Company size | Small & medium enterprises | Large, established companies |
| Listing platform | NSE Emerge, BSE SME | NSE, BSE (main exchanges) |
| Issue size | Smaller | Larger |
| Regulations | Relaxed compliance norms | Strict SEBI compliance |
| Minimum investment | Higher | Lower |
| Liquidity | Generally lower | Higher trading volumes |
Always review the company’s red herring prospectus and fundamentals before applying, especially for SME IPOs, where liquidity and risk can vary widely.
Last updated: 25 Sep 2025
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