IPO Consultant in Hyderabad: CA Murli Chandak’s Guide to Mainboard and SME IPO Readiness for Telangana’s Pharma, GCC and Growth Companies

In short: Hyderabad has one of the deepest pools of IPO-ready companies in India: Telangana accounts for roughly a third of the country’s pharmaceutical and bulk-drug production, Genome Valley hosts more than 200 biotech and pharma companies, the city runs 355-plus global capability centres, and a sizeable T-Hub and WE Hub startup base sits alongside an older generation of family-owned manufacturing, infrastructure and trading groups. Every one of these companies faces the same decision when it outgrows bank finance and private equity: the mainboard of the NSE or BSE, or the SME platforms (NSE Emerge and BSE SME), under a SEBI framework that was materially tightened in 2025 and refined again in March 2026. This guide explains how an IPO consultant in Hyderabad fits alongside the merchant banker, the current eligibility tests for both routes, the step-by-step process from readiness assessment to T+3 listing, realistic timelines and costs, the governance and post-listing obligations that begin on listing day, and how I support Hyderabad companies through the readiness, financial-preparation and valuation work that decides whether a listing succeeds.

By CA Murli Chandak, FCA — Fellow Chartered Accountant and IBBI-Registered Valuer (Securities or Financial Assets), registration IBBI/RV/07/2021/14408, with 8+ years in valuation, audit and advisory practice. Regulatory citations verified against SEBI, NSE and NSDL sources as at September 2026.

Contents

1. 1. Why Hyderabad Companies Are Looking at an IPO in 2026
2. 2. What an IPO Consultant Does, and How the Role Sits Alongside the Merchant Banker
3. 3. Mainboard vs SME IPO: Eligibility Under the ICDR Regulations
4. 4. IPO Readiness Assessment: What to Test Before Appointing Anyone
5. 5. The IPO Process Step by Step
6. 6. DRHP vs RHP: The Two Offer Documents
7. 7. Financial Preparation: Restatement, KPIs and Related-Party Clean-Up
8. 8. Governance Readiness Under LODR and the Insider Trading Regulations
9. 9. How Long an IPO Takes and What It Costs
10. 10. Post-Listing Compliance: What Changes on Listing Day
11. 11. Common IPO Readiness Mistakes Hyderabad Companies Make
12. 12. IPO Readiness Services From CA Murli Chandak
13. 13. Frequently Asked Questions
14. Discuss Your IPO Readiness

1. Why Hyderabad Companies Are Looking at an IPO in 2026

Hyderabad’s corporate base is unusually well suited to public listing. The pharmaceutical and life-sciences cluster produces roughly a third of India’s bulk drugs and around a third of the world’s vaccine doses, and its API, formulation and contract-research companies carry exactly the kind of multi-year profit track record that the mainboard eligibility tests reward. The city’s 355-plus global capability centres and the IT-services and SaaS businesses concentrated around HITEC City and the Financial District generate a second pool of candidates, some of them Indian subsidiaries of overseas groups that eventually consider a domestic listing. Layered on top are the T-Hub and WE Hub-incubated deep-tech and AI startups now reaching Series B and C scale, and the engineering, infrastructure, healthcare-delivery, agri-processing and logistics groups that make up Telangana’s older commercial economy.

An IPO gives these companies growth capital without the covenants that accompany debt, a liquidity route for founders and early investors, listed equity that can fund acquisitions and employee stock plans, and the credibility that comes with public disclosure. It is also one of the most demanding transactions a company will ever run: restated financial statements, a several-hundred-page offer document, coordination among a dozen or more intermediaries, and a permanent change in how the company governs itself. The difference between a listing that lands on time at the intended valuation and one that stalls in diligence is almost always decided before the merchant banker is appointed. That preparatory phase is where a Hyderabad IPO consultant earns the fee.

2. What an IPO Consultant Does, and How the Role Sits Alongside the Merchant Banker

Two professionals are often confused, and the distinction matters. The merchant banker, called the Book Running Lead Manager (BRLM) in a mainboard issue and the Lead Manager in an SME issue, is an intermediary registered under the SEBI (Merchant Bankers) Regulations, 1992. It conducts due diligence, drafts and files the offer document, signs the due-diligence certificate to SEBI and the exchanges, markets the issue and runs the book. Its obligations run to the regulator and to investors as much as to the issuer.

The IPO consultant is engaged by the company, at its own discretion, and works in the company’s interest. The consultant is appointed before the merchant banker and remains alongside it: testing eligibility, running the readiness diagnostic, organising the company’s financial and corporate information, preparing the valuation and equity-story groundwork, negotiating with intermediaries, and keeping the overall programme on schedule. A company that arrives at the merchant banker’s diligence with restated numbers reconciled, related-party transactions documented and governance in place shortens the timeline and typically obtains better commercial terms.

For Hyderabad’s first-time issuers, particularly family-owned manufacturing groups and founder-led technology companies, this coordination and preparation role is where the value concentrates. Promoters and finance teams that have never been through a public issue consistently underestimate the depth of information required and the speed at which intermediaries expect responses. In my engagements, the readiness diagnostic and the financial and valuation preparation are the core of the work; the SEBI-registered merchant banker is then appointed on the strength of a company that is ready for it.

3. Mainboard vs SME IPO: Eligibility Under the ICDR Regulations

The first strategic decision is the platform. The mainboard of the NSE and BSE is governed by Chapter II of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations); the SME platforms, NSE Emerge and BSE SME, are governed by Chapter IX.

3.1 Mainboard IPO on NSE or BSE

The draft offer document is filed with SEBI, which reviews it and issues observations before the issue can open. The principal eligibility conditions under Regulation 6(1), tested on a restated and consolidated basis, are:

• Net tangible assets of at least ₹3 crore in each of the three preceding full financial years, of which not more than fifty per cent are held in monetary assets (relaxed where the issue is entirely an offer for sale).
• Operating profit (earnings before interest, depreciation and tax) of at least ₹15 crore on average over the three preceding years, with operating profit in each of those years.
• Net worth of at least ₹1 crore in each of the three preceding full financial years.
• Where the name has changed in the preceding year, at least fifty per cent of revenue from the activity suggested by the new name.
• The exchanges’ own criteria on post-issue paid-up capital and market capitalisation, and the minimum promoter contribution of twenty per cent of post-issue capital under Regulation 14.

A company that does not meet the profitability track record may still list under Regulation 6(2) through the book-building route, provided at least seventy-five per cent of the net offer is allotted to qualified institutional buyers. Several loss-making technology and consumer companies have listed this way in recent years, and it is the route most relevant to Hyderabad’s venture-funded deep-tech and SaaS companies.

3.2 SME IPO on NSE Emerge or BSE SME

The SME platforms allow smaller companies to list under a proportionate framework: the draft offer document is reviewed by the stock exchange rather than SEBI, the process is faster and the minimum issue size is lower. The framework was significantly tightened by the SEBI (ICDR) (Amendment) Regulations, 2025, notified in March 2025 following the SEBI Board’s December 2024 decisions. The key elements now in force, which the lead manager confirms at the time of filing, are:

• Post-issue paid-up capital not exceeding ₹25 crore under Regulation 229, with the exchanges’ own criteria applying alongside.
• Operating profit (EBITDA) of at least ₹1 crore from operations in at least two of the three preceding financial years, under Regulation 229(6).
• Offer for sale capped at twenty per cent of the total issue size, and no selling shareholder may sell more than fifty per cent of their pre-issue holding.
• General corporate purposes capped at fifteen per cent of the amount raised or ₹10 crore, whichever is lower, under Regulation 230(2), and a bar on using proceeds to repay loans from promoters or related parties.
• Minimum application size raised to two lots, materially increasing the ticket size for individual investors and reducing speculative oversubscription.
• Mandatory underwriting of the entire issue and market making for a prescribed period after listing.
• A one-year cooling period after conversion from a proprietorship, partnership or LLP, and after a change in promoters exceeding fifty per cent, before an offer document can be filed.

The SME route remains attractive for profitable, well-governed Hyderabad businesses with a clear growth plan and an issue size typically between ₹10 crore and ₹80 crore. It is no longer a route for companies that are not ready for public ownership.

3.3 Key differences at a glance

Parameter	Mainboard IPO (NSE/BSE)	SME IPO (NSE Emerge/BSE SME)
Governing chapter	ICDR Regulations, Chapter II	ICDR Regulations, Chapter IX
Offer document review	SEBI issues observations	Stock exchange grants in-principle approval
Profitability test	Average operating profit of ₹15 crore over three years, or the QIB route	Operating profit of ₹1 crore in two of the three preceding years
Post-issue paid-up capital	Above ₹10 crore (exchange criteria apply)	Not exceeding ₹25 crore
Typical issue size	₹100 crore to several thousand crore	₹10 crore to ₹80 crore
Underwriting	Optional in book-built issues	Mandatory, 100 per cent
Market making	Not required	Mandatory for the prescribed period
Financial reporting after listing	Quarterly	Half-yearly
Cost as a share of issue size	Lower percentage, higher absolute cost	Higher percentage, lower absolute cost

An SME listing can also serve as a stepping stone: a company that later meets the mainboard criteria may migrate under Regulation 277 after the prescribed period, with shareholder and exchange approval, without a fresh public issue. The NSE Emerge listing criteria and the corresponding BSE SME criteria sit on top of the ICDR tests and should be checked together.

4. IPO Readiness Assessment: What to Test Before Appointing Anyone

Before a company approaches any intermediary, it should go through a structured readiness assessment. The objective is to find every gap that could delay the issue, attract adverse observations or reduce the valuation, and fix it while the company still controls the timetable. The areas I test in a Hyderabad readiness diagnostic are:

• Financial eligibility. The three-year net tangible asset, operating profit and net worth thresholds on a restated, consolidated basis, and whether the company is better served by the QIB route or the SME platform.
• Promoter and shareholding structure. Identification of the promoter group, minimum promoter contribution (Regulation 14, or Regulation 238 for SME issues), lock-in eligibility under Regulations 16 and 17, and any shareholder agreements or special rights that must fall away before listing.
• Corporate history. Three years of operations, past changes in name, objects or control, and mergers, demergers or conversions that affect the track record.
• Related-party transactions. Every transaction with promoters, group companies and key managerial personnel, its arm’s-length basis, and which arrangements should be unwound or formalised.
• Litigation and regulatory matters. All civil, criminal, tax and regulatory proceedings involving the company, its subsidiaries, promoters and directors, and the materiality policy that will govern disclosure. For pharma companies this includes regulatory inspection histories and environmental compliance.
• Tax and statutory compliance. Income tax, GST, customs, labour, environmental and FEMA compliance, confirmation that neither the company nor its promoters are debarred, wilful defaulters or fugitive economic offenders under Regulation 5, and quantification of contingent liabilities.
• Internal controls and governance. Internal financial controls, ERP audit trails and management reporting against listed-company standards.
• ESOPs and existing instruments. Employee stock option schemes against the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, and the treatment of convertible instruments, preference shares and warrants.
• Capital structure and valuation. Whether a bonus issue, split or conversion is needed to arrive at a sensible post-issue capital and price band, and a preliminary valuation view to test whether the promoters’ expectations and the likely market outcome are aligned.

The output is a gap analysis and remediation plan with owners and target dates. Finding these gaps before the merchant banker and legal counsel begin billable diligence is consistently cheaper than finding them afterwards.

5. The IPO Process Step by Step

The sequence below applies to a mainboard issue; an SME issue follows the same shape with exchange review in place of SEBI observations and a compressed timeline.

1. Readiness assessment and route selection. Eligibility is tested, the platform chosen, a target listing window set, and board and shareholder approvals obtained under Sections 23, 26, 32 and 62 of the Companies Act, 2013. The articles of association are amended to remove provisions inconsistent with listing.
2. Appointment of the merchant banker and other intermediaries. Lead manager(s), legal counsel to the issuer and to the underwriters, peer-reviewed auditors for restatement, the registrar to the issue, a practising company secretary and, where required, valuers. The consultant helps evaluate proposals, negotiate terms and set up the data room.
3. Financial restatement and due diligence. Restated consolidated financial statements for three years and any stub period are prepared under Schedule VI of the ICDR Regulations and the ICAI Guidance Note on Reports in Company Prospectuses, examined by an auditor holding a valid ICAI peer-review certificate, while legal counsel and the merchant banker run business, financial and legal diligence.
4. DRHP preparation and filing. The draft red herring prospectus is drafted collaboratively and, once approved by the board, filed with SEBI and the exchanges under Regulation 25 together with the prescribed fees and the due-diligence certificate. Since the March 2026 amendment, a draft abridged prospectus is filed alongside it.
5. SEBI review and observations. SEBI and the exchanges review the DRHP, raise queries and, after the issuer’s responses, SEBI issues its observations. The exchanges grant in-principle approval. Observations remain valid for twelve months under Regulation 44.
6. RHP filing with the Registrar of Companies. The document is updated for observations, the latest financials and material developments; the price band is announced at least two working days before opening under Regulation 29; and the red herring prospectus is filed with the RoC under Section 32 of the Companies Act.
7. Anchor allocation and the public issue. Anchor investors may be allotted a portion of the QIB book one working day before opening, subject to lock-in, giving an early signal of institutional demand.
8. Bidding, allotment and demat credit. The issue stays open for a minimum of three working days under Regulation 46, bids come in through ASBA and UPI, and the basis of allotment is finalised with the designated stock exchange.
9. Listing on T+3. Under SEBI circular SEBI/HO/CFD/TPD1/CIR/P/2023/140 dated 9 August 2023, listing and trading commence on the third working day after issue closure, mandatory for all public issues opening on or after 1 December 2023.
10. Transition to listed-company compliance. From listing day the company is bound by the LODR Regulations, the Insider Trading Regulations and the Takeover Regulations; the systems built during the pre-IPO phase go live immediately.

6. DRHP vs RHP: The Two Offer Documents

The draft red herring prospectus (DRHP) is the first public version of the offer document. It contains everything Schedule VI requires except the price, the issue dates and the number of shares: business and industry description, risk factors, restated financials, management discussion and analysis, key performance indicators, objects of the issue, capital structure and shareholding, board and governance disclosures, litigation, material contracts and the basis for the offer price. Once filed it is hosted for public comment for twenty-one days under Regulation 26 while SEBI examines it. SEBI’s observations are not an approval: they confirm that disclosure is adequate, and say nothing about the merits of the company or the price.

The red herring prospectus (RHP) is the updated document filed with the Registrar of Companies before the issue opens. It incorporates SEBI’s observations, financial information not older than six months at the date of filing, material developments since the DRHP, the price band and issue dates, and the syndicate details. After the issue, the final prospectus records the price and the number of shares allotted.

Aspect	DRHP	RHP
Timing	Filed at the start of regulatory review	Filed after SEBI observations, before opening
Filed with	SEBI and the stock exchanges	Registrar of Companies, SEBI and the exchanges
Price and dates	Not included	Price band and issue dates included
Financial information	As available at drafting	Updated; not older than six months
Legal status	Draft, subject to change	Statutory document under the Companies Act

Disclosure quality in both documents is where liability sits. Risk factors must be specific, KPIs must reconcile to audited financials and be certified as Schedule VI requires, and the objects of the issue must rest on board-approved estimates and quotations. Inaccurate disclosure exposes the company, its directors and the merchant banker to regulatory action and to liability under Sections 34 to 36 of the Companies Act, 2013.

7. Financial Preparation: Restatement, KPIs and Related-Party Clean-Up

Financial preparation is the most time-consuming element of readiness and the area where this practice’s audit and valuation background is most directly useful.

• Restated financial statements. Three years and any stub period presented on a uniform basis, adjusted for changes in accounting policy, prior-period items and audit qualifications. Companies still reporting under Indian GAAP may need to transition to Ind AS, and the consolidation perimeter must be settled before restatement begins; Hyderabad pharma groups held through multiple SEZ and licensing entities frequently need this rationalised first.
• Revenue and profitability analysis. Revenue by product, geography and customer, margin drivers and seasonality, with every material movement explained and management accounts reconciled to audited figures. Inconsistency between the narrative and the numbers is the most common cause of diligence delay.
• Working capital and debt. Borrowing arrangements, covenants and security documented, and, where the objects include debt repayment or working capital, lender certificates and auditor-certified projections in place.
• Related-party transactions and the promoter group. A complete map of transactions across the restated period, their pricing, audit-committee approval where required, and a decision on which arrangements end before listing. Promoter-group entities in similar lines of business must be identified and any conflict addressed.
• Litigation, tax and contingent liabilities. A full inventory, a board-adopted materiality policy, and income tax, GST and transfer pricing positions reviewed and quantified.
• KPIs and the equity story. The metrics that best describe the business, computed consistently across the restated period and certified by the auditor or an independent chartered accountant. For Hyderabad SaaS and GCC-linked businesses that means annual recurring revenue, retention and customer concentration on an auditable basis; disclosed KPIs must continue to be reported for at least a year after listing or until the proceeds are fully deployed.
• Valuation groundwork. A defensible view of enterprise and equity value, built from the same discounted cash flow, comparable company and net asset methods used in this practice’s Registered Valuer work, so that the price band discussion with the merchant banker starts from evidence rather than aspiration. Where ESOP grants precede the IPO, the grant-date fair values and the pre-IPO valuation need to tell a consistent story.

8. Governance Readiness Under LODR and the Insider Trading Regulations

A listed company operates under a governance framework far more prescriptive than a private company’s, and investors and exchange listing committees read board composition and committee quality as a signal of how seriously the company takes public ownership. The main requirements to have in place before filing:

• Board composition satisfying Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 on independent directors, at least one woman independent director, and the directorship limits under Regulation 17A.
• Committees — audit, nomination and remuneration, stakeholders’ relationship and risk management — constituted under Regulations 18 to 21 with the prescribed composition and terms of reference.
• Policies and codes on related-party transactions, materiality of events, preservation of documents, whistle-blowing, and codes of conduct for directors, senior management and insider trading.
• The insider-trading framework under the SEBI (Prohibition of Insider Trading) Regulations, 2015: a structured digital database of designated persons and unpublished price-sensitive information under Regulation 3(5), a code of conduct, trading windows and pre-clearance procedures.
• Disclosure workflows able to meet the Regulation 30 timelines: thirty minutes for board-meeting outcomes, twelve hours for events originating within the company, and twenty-four hours in other cases.
• Investor grievance machinery, including SCORES registration and a compliance officer, and a finance function able to close quarterly results within forty-five days and audited annual results within sixty days under Regulation 33.

Governance readiness is best addressed six to twelve months before filing, so that new independent directors know the business and committee processes are running before the merchant banker’s diligence begins.

9. How Long an IPO Takes and What It Costs

A realistic end-to-end timeline for a mainboard IPO is twelve to eighteen months from the decision to list; the SME route is typically completed in six to nine months.

Phase	Mainboard IPO	SME IPO
Pre-IPO preparation (readiness, governance, restructuring)	3 to 9 months	2 to 4 months
Intermediary appointment, restatement, diligence and DRHP drafting	3 to 5 months	2 to 3 months
SEBI or exchange review and observations	2 to 4 months	1 to 2 months
RHP, marketing and issue opening	1 to 2 months	3 to 6 weeks
Bidding, allotment and T+3 listing	About 1 week	About 1 week

Audit qualifications, incomplete litigation records, unresolved related-party arrangements, changes in the consolidation perimeter and adverse market conditions all extend the timeline. Because SEBI’s observations expire after twelve months, the plan should run backward from the intended listing window with buffers at each dependency, and the restated financials must be no more than six months old when the RHP is filed.

Cost. As a broad indication, total issue expenses for a mainboard IPO commonly fall between three and seven per cent of the issue size, and for an SME IPO between eight and fifteen per cent, because fixed costs are spread over a smaller issue. The main heads are merchant banker fees (fixed plus success-linked, including underwriting and selling commissions), legal counsel, audit and restatement, registrar, SEBI and exchange fees, valuation and other certifications, marketing and statutory advertising, printing, compliance systems, and post-listing costs such as annual listing fees and independent-director remuneration. Issue expenses are borne by the company in a fresh issue and shared proportionately with selling shareholders in an offer for sale, and are disclosed in the offer document. Written fee proposals from every intermediary should be in hand before appointment, and the exchanges’ current fee schedules should be taken from their own websites at the time of filing.

10. Post-Listing Compliance: What Changes on Listing Day

Listing day is the beginning of the company’s public-market obligations. From admission to trading:

• Periodic reporting. Mainboard companies publish auditor-reviewed quarterly results within forty-five days of quarter-end and audited annual results within sixty days under Regulation 33; SME-listed companies report half-yearly.
• Event disclosures. Material events, board outcomes, changes in directors or auditors, credit-rating changes, fraud and defaults are disclosed within the Regulation 30 timelines.
• Related-party transactions. Prior audit-committee approval, shareholder approval of material transactions and half-yearly disclosure under Regulation 23. SME-listed entities have historically been exempt from Regulations 17 to 27 under Regulation 15(2)(b), but since 1 April 2025 Regulation 23 applies to any SME-listed entity with paid-up equity capital above ₹10 crore or net worth above ₹25 crore.
• Corporate governance reporting, annual secretarial audit under Regulation 24A, a minimum of four board meetings a year with no more than one hundred and twenty days between them, and a website compliant with Regulation 46.
• Insider-trading and takeover compliance. Trading-window closures, pre-clearance, disclosures of promoter and designated-person trading, and monitoring of shareholding changes and encumbrances under Regulations 29 to 31 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Because these obligations apply from the first day of trading, the compliance calendar, disclosure workflows and reporting processes are built during the pre-IPO phase. Early compliance lapses damage the company’s standing with the investors it has just attracted.

11. Common IPO Readiness Mistakes Hyderabad Companies Make

• Appointing intermediaries before testing eligibility, which wastes cost and time when a threshold turns out to be unmet on a restated basis.
• Differences between management accounts, audited financials and tax filings, the most common reason for a delayed restatement.
• Informal promoter-group arrangements that cannot be documented or justified at arm’s length, a particular issue in family-owned Hyderabad manufacturing and trading groups.
• Missing board resolutions, share-transfer records or licences that must be reconstructed under diligence pressure.
• KPIs that cannot be computed consistently across the restated period and therefore cannot be disclosed, weakening the equity story.
• Vague objects of the issue that invite SEBI queries and reduce investor confidence.
• Late appointment of independent directors and hurried committee formation, visible to both investors and exchanges.
• Undisclosed litigation or regulatory matters discovered during diligence, including pharma regulatory inspection findings, which undermine the credibility of the whole document.
• Choosing the cheapest merchant banker or auditor rather than the one with bandwidth and relevant experience.
• Treating SEBI’s observations as an approval, when they address disclosure adequacy only.
• A valuation expectation formed from a private funding round rather than from public-market comparables, which leads to a price band the book cannot support.

12. IPO Readiness Services From CA Murli Chandak

IPO work in this practice covers the readiness, financial-preparation and valuation phases, and coordination of the wider intermediary group once the company is ready:

• Eligibility and route advisory. Testing the mainboard and SME thresholds on a restated basis and recommending the platform and timing.
• IPO readiness diagnostic. A structured gap analysis across financial, legal, tax, governance and operational areas, delivered as a prioritised remediation plan with owners and dates.
• Financial and compliance review. Historical financials, accounting policies, consolidation perimeter, tax positions and statutory compliance reviewed ahead of restatement, drawing on the practice’s statutory and concurrent audit and due-diligence background.
• Pre-IPO valuation. A defensible enterprise and equity valuation to anchor the price band discussion, alongside any Registered Valuer reports needed for pre-IPO allotments, ESOP grants or restructuring under the Companies Act.
• Capital-structure advisory. Bonus issues, splits, conversion of instruments, promoter contribution and post-issue shareholding.
• Merchant banker, auditor and counsel coordination. Evaluating proposals, negotiating engagement terms, running the master work plan, data room and issues log through drafting, filing and updates.
• KPI and equity-story support. Identifying, computing and documenting the KPIs and helping management articulate the growth story in a form that survives diligence.
• Governance preparation. Board restructuring, committee constitution, policy drafting and the insider-trading framework.
• Post-IPO compliance set-up. The LODR calendar, disclosure workflows and first-quarter reporting processes, with continuing Virtual CFO support where the finance function needs it in the first year as a listed company.

13. Frequently Asked Questions

Q1. What is the difference between an IPO consultant and a merchant banker?

A: The merchant banker is a SEBI-registered intermediary responsible for due diligence, the offer document and the issue process, with obligations to the regulator and investors. The IPO consultant is appointed by the company, works in its interest, and handles readiness, financial preparation, valuation and coordination of the overall programme, before and alongside the merchant banker.

Q2. Can a Hyderabad SME launch an IPO under the 2025 rules?

A: Yes, provided it meets Regulation 229: post-issue paid-up capital not exceeding ₹25 crore and operating profit of at least ₹1 crore in two of the three preceding financial years, together with the exchange’s own criteria. The 2025 amendments also cap the offer for sale at twenty per cent of the issue, cap general corporate purposes at fifteen per cent or ₹10 crore, and bar the use of proceeds to repay promoter loans.

Q3. Our deep-tech company is loss-making. Is a mainboard IPO still possible?

A: Potentially, through Regulation 6(2): a book-built issue with at least seventy-five per cent of the net offer allotted to qualified institutional buyers. The equity story, KPIs and valuation evidence then carry more weight than the profit track record, which makes the financial-preparation phase even more important.

Q4. Does SEBI approve an IPO?

A: No. SEBI reviews the draft offer document for adequacy of disclosure and issues observations. It does not approve the issue, endorse the company or vet the price, and every offer document carries a disclaimer to that effect.

Q5. How long does an IPO take for a Hyderabad company?

A: Typically twelve to eighteen months for a mainboard IPO and six to nine months for an SME IPO from the decision to list, depending on how much readiness work is outstanding. Listing itself now occurs on the third working day after the issue closes.

Q6. What is the difference between a DRHP and an RHP?

A: The DRHP is the draft filed with SEBI and the exchanges for review and twenty-one days of public comment; it excludes the price and issue dates. The RHP is filed with the Registrar of Companies before opening, incorporating SEBI’s observations, financials not older than six months, the price band and the issue dates.

Q7. What does an IPO cost?

A: As a broad indication, three to seven per cent of the issue size for a mainboard IPO and eight to fifteen per cent for an SME IPO, depending on size and complexity. Exchange and SEBI fee schedules should be taken from the exchanges’ own websites at the time of filing.

Q8. How does a Hyderabad pharma company’s regulatory history affect its IPO?

A: Regulatory inspection findings, intellectual-property litigation and environmental compliance all fall within the litigation and risk-factor disclosures in the offer document. Compiling them fully, adopting a materiality policy and addressing open items before filing avoids the far more damaging discovery of an undisclosed matter during diligence.

Q9. Do we need a Registered Valuer’s report as part of the IPO?

A: The IPO price itself is set through book building rather than a statutory valuation report. Registered Valuer reports are, however, commonly required for pre-IPO events under the Companies Act — a preferential allotment, an ESOP grant or a group restructuring — and a defensible pre-IPO valuation is central to the price band discussion with the merchant banker.

Q10. Can an SME-listed company move to the mainboard later?

A: Yes. A company that satisfies the mainboard criteria may migrate under Regulation 277 after the prescribed listing period, with shareholder and exchange approval, without a fresh public issue.

Discuss Your IPO Readiness

If your Hyderabad company is evaluating a mainboard or SME listing in 2026 or 2027, tell me where you are today — financials, shareholding, governance and growth plan — and I can map out what remains to be done before a merchant banker is appointed.

CA Murli Chandak – FCA | IBBI-Registered Valuer (Securities or Financial Assets) | IBBI/RV/07/2021/14408
Website: murlichandak.com
Phone: +91 99985 39902
Email: murlichandak@murlichandak.com
LinkedIn: Connect with CA Murli Chandak

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This article is intended for general guidance only and does not constitute legal, financial or investment advice. Regulatory positions are stated as at September 2026 and were verified against the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (as last amended on 21 March 2026), the SEBI (ICDR) (Amendment) Regulations, 2025 on the SME framework, the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2025, SEBI circular SEBI/HO/CFD/TPD1/CIR/P/2023/140 dated 9 August 2023, and NSE Emerge listing criteria. Hyderabad and Telangana sector references are drawn from Government of Telangana and publicly available industry sources. Thresholds, timelines and procedures under the SEBI framework are revised from time to time and should be confirmed with the merchant banker and legal counsel on the date of filing.

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