SME IPO vs Mainboard IPO – Differences, Risks & Rules

Difference between SME IPOs and mainboard IPOs: listing platform, issue size, minimum application, market makers, liquidity, risks and how to apply.

Where they list

Mainboard IPOs list on the main boards of NSE and BSE. SME IPOs list on the dedicated SME platforms — NSE Emerge and BSE SME — and can later migrate to the main board once they meet the criteria.

Key differences

• Size: SME issues are much smaller than mainboard issues.
• Minimum investment: SME IPOs have large lot sizes, so the minimum application is much higher than in mainboard IPOs.
• Investor categories: mainboard IPOs have QIB, NII and retail quotas; SME IPOs have a simpler structure.
• Market maker: SME stocks have a market maker for liquidity after listing.
• Liquidity and risk: SME stocks usually trade in lots, are less liquid and can be more volatile.

Should you invest in SME IPOs?

SME IPOs can see high subscription and listing gains, but they carry higher business and liquidity risk. Read the offer document carefully, check the company's financials, promoters and use of proceeds, and invest only what you can afford to hold through volatility.

SME IPO vs Mainboard IPO – Differences, Risks & Rules IPO FAQs

Can retail investors apply in SME IPOs?

Yes, individual investors can apply in SME IPOs through UPI or ASBA, subject to the minimum application size of the issue.

What is NSE Emerge?

NSE Emerge is the National Stock Exchange's platform for listing small and medium enterprises.