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What general criteria should a company fulfil to launch an IPO

What general criteria should a company fulfil to launch an IPO

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Answer #1

IPO is the abbreviation of Initial Public Offering.

IPO is the first time when any private company decides to go public by selling its shares.

SEBI (Securities and Exchange Board Of India) has decided the following criteria to qualify for an IPO:

  • The total net worth minimum Rs. 1CR each in last three years.
  • The company has at least 15CR as its PBT (Profit Before Tax).
  • The issuing size should not be more than 5 times the pre-issue net value.
  • If the company has undergone any merger and now it's operating with a different name than it first started with then it has proved that almost 50% of its revenue form the past year was generated by doing business with a name changed.

The issuing company should also adhere the compliance of the special acts i.e Securities contracts Act,1956; SEBI Act, 1992.

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