The First Ninety Days of SME IPO Preparation: A Practical Plan

The first ninety days of SME IPO preparation should answer three questions: should we list at all, what stands in our way, and who needs to be on the team. A sensible order is to decide and diagnose in the first few weeks, repair and restructure in the middle weeks, and assemble documents and advisors in the last few weeks. Nothing here promises a listing, because eligibility and approvals rest with the exchange and the regulator.

The plan below uses phases, not dates, because every company starts from a different place. A business with clean audited accounts and tidy records may move faster. One with years of loose paperwork may need more than three months for the repair phase alone. Check current rules with your merchant banker and legal advisor at each step.

Weeks one to three: decide and diagnose

Begin with the reason. An SME IPO, an issue of shares to the public on a platform meant for smaller companies, brings money, visibility and a share price. It also brings public disclosure, regular reporting, a board that must act independently and obligations that continue for as long as you are listed. Promoters who list for prestige alone often find the obligations heavy.

Write down what the money is for, how much control you are willing to share and what you will do if the market is unfavourable at the time you are ready. Compare listing with alternatives such as bank borrowing or a private investor, so the decision is deliberate. Discuss it with family members, co-promoters and key managers early, since all of them will be affected.

Then run an honest diagnosis. List the things a regulator, an exchange and a prospective investor would look at, and mark each as sound, fixable or serious:

• The legal form of the company and whether it can be a public company
• Track record of profits and cash generation over several years
• Quality and consistency of audited financial statements
• Statutory compliance: tax, provident fund, labour and company law filings
• Ownership history and any pending disputes or notices
• Related-party dealings between the company and promoters
• Reliance on a few customers, suppliers or the promoter personally

This diagnosis is the most valuable output of the first phase. It tells you whether the target is realistic and which problems need the most time.

Weeks four to eight: repair and restructure

Now work through the list in order of seriousness. Items that need the longest lead time go first.

Financial statements usually take the most effort. Public investors expect statements that are consistent across years, follow accepted accounting standards and reconcile with tax returns and bank records. If past accounts contain errors, unusual classifications or gaps, discuss with your auditor how they should be corrected and presented. Do not rush a clean-up by simply changing numbers; the explanation matters as much as the figure.

Compliance gaps come next. Pay overdue dues, file missing returns and close open notices where you can. Where a dispute is genuine and continuing, prepare a short factual summary, because it will need to be disclosed.

Then look at structure. If the business is a private company, a partnership or a firm, you will need to understand the steps and time needed to move into the right form. If several group companies share assets, customers or staff, consider whether they should be tidied before the listed entity is presented to investors. Related-party arrangements should be moved to documented, fair terms.

Weeks nine to eleven: build the governance layer

A listed company is expected to be run through a board and committees, not by the promoter alone. In this phase, decide who will sit on the board, who will qualify as independent, and who will serve on committees that review audit and related matters. People with real experience are more useful than names added to satisfy a rule.

Identify the roles you will need in finance and compliance, such as a company secretary and a person responsible for ongoing filings with the exchange. If you do not already have a reliable finance function, plan for it now. Month-end closing, internal controls and timely reporting are not optional once you are listed.

Also review how information flows inside the company. Investors will ask for projections and explanations, and managers should be able to give consistent answers. Agree who may speak on behalf of the company, since public statements during an offer are restricted.

Weeks twelve and thirteen: assemble documents and advisors

By the final weeks you should be able to produce a set of documents that supports your story. That typically includes audited financial statements for the required period, corporate records, share ownership history, material contracts, licences and registrations, property papers and a list of litigation and notices.

At the same stage, begin speaking to merchant bankers, the registered intermediaries who manage the issue and prepare the offer document. Speak to more than one. Ask what they have noticed about your readiness, how they would approach pricing and timing, and what they will charge, and compare answers calmly. You will also need legal counsel, an auditor who meets the applicable requirements and other intermediaries later in the process.

What to expect at the end of ninety days

By the end of this period you should have a clear view: either you are close enough to engage a merchant banker formally, or you know what remains to be fixed and roughly how long it will take. Both outcomes are useful. A company that postpones a listing for a year to fix its foundations usually does better than one that files with unresolved issues.

Where to go from here

Treat the first three months as an investment in knowing where you stand. Decide with open eyes, fix what takes longest, build governance early and keep every document consistent. If you would like a second pair of eyes on your readiness, Lalsar Apex Solutions can work alongside your registered merchant banker. No advisor can guarantee a listing, price or timeline, so build in margin for surprises.