Lalsar Apex Solutions · Question

Can a business improve its credit standing while preparing for an SME IPO?

Short answer

Yes, and the two efforts reinforce each other. Settling overdue dues, tidying accounts, reducing needless borrowing and filing returns on time improve how lenders and rating agencies see the business, and the same habits are checked by merchant bankers and regulators before a listing. Start with the shared basics, and keep rating changes consistent with what the offer document will say.

In more detail

Listing preparation asks whether the business is orderly, transparent and sustainable. Credit improvement asks whether it pays on time and has a sound structure. The overlap is large.

Clean, consistent accounts, prepared on a regular timetable and reconciled to tax returns.
Prompt repayment and clear records of every facility.
Removal of unexplained transactions with related parties.
Sensible levels of borrowing relative to the business.
Documented policies for approvals, stock and receivables.

Raising fresh money to strengthen the balance sheet may need lender consent and can alter the ratios an investor will study. Rapid changes just before a rating review or filing can look like window dressing. Large one-time clean-ups should be explained plainly rather than hidden.

Begin with an internal review of both credit position and listing readiness. Fix payment discipline and reporting first, because their effect builds gradually. Then address structural questions, such as capital mix and governance. Consult your lenders early, since existing facilities may contain conditions about ownership change or share issues.

A packaging manufacturer planning a listing

The company clears small overdue dues, reconciles its books to tax filings and reduces reliance on a costly short-term line. When a rating review comes, the improved record is visible, and the same reconciled books support the draft offer document.

Neither a rating improvement nor a successful listing can be promised; both depend on facts and on decisions by others.

Key points

Payment discipline and clean accounts help both credit standing and listing readiness.
Rapid last-minute changes can look cosmetic, so build improvements over time.
Existing lenders may need to consent before a share issue or structural change.
Explain one-time clean-ups clearly instead of hiding them.
No outcome is guaranteed, because ratings and listings rest on others' decisions.

Who this applies to

Promoters considering a listing in the next few quarters.
Finance heads running a credit clean-up and listing readiness together.
Owners whose ratings may be reviewed during the listing process.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority. Lalsar Holdings' financial advisory and financing work is advisory and facilitation only. Lalsar Holdings is not a lender. Sanction and disbursement of any credit facility is at the sole discretion of the partner bank, NBFC, or financial institution involved, subject to their own eligibility criteria and credit policy.