What is the meaning of SME IPO in India ? What are some criteria about it ?

Indian Economy is dominated by small and medium-sized enterprises (SMEs). They employ more than 40% of India's workforce and account for around 45% of India's manufacturing output (as per Dec 2014).

India's SMEs are very productive due to their small size and inability to adopt technology. SME failures are often due to lack of financing.

SME is a separate platform that was created by Stock Exchanges in India for SMEs to raise funds through stock market investors.

Bombay Stock Exchange BSE is the oldest stock exchange in India. It offers a platform called BSE SME for SME's.

National Stock Exchange (NSE), India's largest stock exchange, offers a platform called EMERGE for SME's.

SME stocks must be listed on an exchange by submitting an Initial Public Offering (IPO) to exchnage's SME platform. IPO is a popular way for companies raise funds from investors and to get listed on exchanges.

Here are some facts and criteria about SMEs that can be used to make IPO fun:

• SME IPOs require that the company has a paid-up capital of Rs 3 Crore, and the same should be its net worth and net tangible assets.
• Companies must have distributable profits according to Section 124 of Companies Act 2013. They should be at least two years old in the three immediately preceding financial years (except extraordinary income).
• According to SEBI guidelines, the minimum trading lot for SME IPOs is 100 to 10000 depending on the issue's price. These lots are periodically reviewed and adjusted based on price movements after listing.