SME IPO - Cost of Fundraising (Fees & Expenses)

Published on Saturday, April 14, 2018 by Chittorgarh.com Team | Modified on Thursday, April 20, 2023

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Small and medium enterprise or SME is the backbone of India. SMEs contributes to around half of industrial output in India. SME sector is the largest job creator. Over 5 Cr SMEs in India faces two main challenges. This includes cost-effective fundraising to run the business and building brand awareness.

Raising fund though SME IPO solves these challenges to some extent. BSE SME and NSE Emerge platform of the BSE and NSE exchanges allows SME to raise fund and get listed at the exchange.

SMEs have many benefits of raising funds through IPO. Some of these benefits include:

Easy access to capital
Reduced cost of borrowing
Increase personal net worth of promoters
Increase liquidity in the business
Tax Benefits
Branding

How much does it cost to raise capital through SME IPO?

SME IPO process involves many parties including a lead manager, legal advisers, registrar, exchanges, depositories, distributors etc.

There are various expenses and fees associated with this process. Usually, these expenses are the cost of borrowing through IPO route for SMEs.

SME IPO Process Free structure (End to End Process)

Please note that below fee structure is for reference only. Each IPO is different and the charges may differ by the IPO. The below expenses does not include the fee of market maker and incidental cost.

SME IPO Expenses

Sr. No.	Particulars	Amount (Rs )
1	Lead Managers to the Issue	20,00,000
2	Legal Advisors Fees	2,00,000
4	RTA Fees, CDSL NSDL Joining Fees	1,00,000
5	Stock Exchange Filing Fees	50,000
6	Peer Review Auditor Fees	2,00,000
7	Allotment- Expenses
	(a) Application Collection from Banks and Reporting / ASBA Fees	50,000
	(b) Stationery and Out-of-Pocket Expenses, Mailing and Handling Expenses and NSDL / CDSL Uploading Fees	50,000
	(c) Listing, Allotment, Dispatch & Basis of Allotment Fees	50,000
8	Statutory Advertising (Minimum Cost)	2,50,000
9	Printing Charges:
	(a) Prospectuses	1,00,000
	(b) Application Forms	1,50,000
10	BSE/NSE Software Expenses (For Issue below 10 Crs. Rs 1,00,000)	1,50,000
11	Miscellaneous Expenses	1,50,000
	Total	35,00,000

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