SEBI proposes 10 changes to SME IPO rules

India's markets regulator SEBI released a consultation paper on October 14 proposing an overhaul of SME IPO rules, covering market-cap based listing thresholds, a higher profitability bar of ₹3 Cr average annual operating profit over three years, removal of the ₹10 Cr cap on general corporate purposes and revised lock-in periods. Public feedback is open until November 4.

• SME listing allowed for companies with post-issue market cap up to ₹1,000 Cr; above ₹4,000 Cr must list on the main board
• Profitability bar rises to average ₹3 Cr annual operating profit over three years, up from ₹1 Cr in two of three years
• Proposal removes the fixed ₹10 Cr cap on general corporate purposes while keeping the 15% limit
• Non-promoter pre-issue lock-in cut from one year to six months; promoters get a uniform one-year lock-in