Main Board IPO in India – Step by Step Guide for How a Company get Listed on Main Board 2025?

Introduction 

Going public on a major stock exchange is a significant event for any company. In India, this typically involves listing on the main board of a major exchange, such as the National Stock Exchange of India (NSE) or the Bombay Stock Exchange (BSE). A Main Board IPO in India is more than just a way to raise funds; it also showcases the company’s readiness for governance, transparency, and public review. 

In this article, we will cover: 

• What a main board IPO is
• Why companies choose this option
• The regulatory and procedural steps, especially the importance of the draft red herring prospectus (DRHP) and the final prospectus (RHP)
• Key eligibility and documentation criteria
• Timelines, costs, and risks
• Best practices and what to look out for from an investor’s perspective

Whether you are part of a company planning to go public or an investor trying to understand the process, this detailed guide is designed to help you. 

What is a “Main Board IPO”? 

A “main board” IPO refers to an initial public offering of a company that wants to list its shares on the primary board of a recognized stock exchange in India, such as NSE or BSE, rather than on a smaller or niche board, like the SME board. These companies tend to be larger, have longer histories, and must meet stricter regulatory and disclosure standards. 

Key characteristics 

• Companies listing on the main board must file a detailed prospectus, starting with the DRHP, with the Securities and Exchange Board of India (SEBI) for review and public disclosure.
• The eligibility criteria, including paid-up capital, number of profitable years, and public shareholding, are stricter compared to SME boards.
• The IPO can follow the book-building route (which is common) or a fixed price route, but book-building is the usual choice for main board companies.
• After the issue closes, shares are listed on the exchange and available for public trading.
• It demands higher standards for corporate governance, disclosure, auditing, and post-listing compliance.

Why companies go for a main board IPO 

• Access to large-scale public equity capital can support growth, acquisitions, or debt reduction.
• Improved visibility, credibility, and brand image comes with being listed, which reflects a kind of “public company standard” in India.
• Liquidity for existing shareholders and promoters offers a route for institutional investors.
• It provides a way to incentivize employees through ESOPs and create exit options.
• After listing, companies may find it easier to raise more capital through rights issues or follow-on public offers on favorable terms.

Eligibility and Pre-Conditions for Main Board IPO 

Before a company can start the IPO process, it must meet certain eligibility requirements laid out by SEBI and the exchanges for main-board listing. While specifics may vary slightly between exchanges, the general criteria are as follows. 

Minimum paid-up capital and track record 

One source states that the post-issue paid-up capital must be at least ₹10 crore, and the company needs to show profitability for at least the previous three years. Another guide mentions that a company must have distributable profits in three out of the last five years, with a minimum of ₹15 crore pre-tax operating profit in three years combined for some cases. 

Key point: The company needs to demonstrate solid historical financial performance and sufficient size to qualify for a main-board listing. 

Appointment of key advisors and compliance structure 

• The company must appoint a SEBI-registered Merchant Banker (Book Running Lead Manager) to lead the IPO process and submit the DRHP.
• It must engage legal advisors, auditors, registrars, and underwriters if necessary. The company must maintain proper corporate governance, auditing, and disclosure practices.
• The company needs to adopt the status of a Public Limited Company if it hasn’t already and follow applicable company laws.
• Promoters’ shareholding, lock-in requirements, and public shareholding norms must be met, including minimum contributions from promoters.
• Dematerialization of shares, which means converting them to electronic form, is required for many transactions before filing the DRHP.

Use of proceeds, public-shareholding, and other conditions 

• The issue document must clearly outline the “objects of the issue,” meaning what the funds raised will be used for, while complying with regulations on fund usage and restrictions on related-party uses.
• The minimum public shareholding requirement after the issue must be met according to the exchange’s listing regulations.

• The company must ensure proper disclosures about risk factors, litigation, financials, capital structure, promoters, management, and more. 

Difference vs. SME IPOs 

It’s helpful to compare this with the SME IPO route because the eligibility criteria are more relaxed there. For example, in SME IPOs, the review may be carried out by the exchange instead of SEBI directly, market makers might be mandatory, and the timeline could be shorter. The key takeaway is that a main board IPO has higher standards, more transparency, a longer timeframe, and more scrutiny, but it also offers greater potential for market access and credibility.

The Step-by-Step Process of a Main Board IPO in India 

Here we go through the steps involved from the decision to go public until listing on the stock exchange. 

1. Pre-IPO Planning & Preparation

The journey begins with the company (issuer) deciding to raise money through a public issue. Key activities include:  

• Appointing a merchant banker, legal advisors, auditors, and registrars.
• Conducting internal due diligence (financial, legal, regulatory, tax, risk).
• Restructuring the company if needed (conversion to public limited, group structuring, compliance readiness).
• Preparing audited financial statements for the last few years (as required), management disclosures, a business plan, risk factors, etc.
• Deciding on funding needs: how much money to raise, new issue vs. offer for sale, public shareholding target, and how proceeds will be used.
• Setting internal governance and compliance mechanisms for public company status.

2. Draft Red Herring Prospectus (DRHP) Filing

Once the groundwork is complete, the company prepares the DRHP (Draft Red Herring Prospectus). This detailed document gives investors and regulators information about the company, its business, finances, risk factors, issue size, and how proceeds will be used. 

• The DRHP is filed with SEBI and the stock exchanges (NSE, BSE).
• Under amendments introduced in November 2022, companies can confidentially pre-file the draft offer document (pre-DRHP) without it being immediately public. This helps protect sensitive business information while preparations continue.
• The DRHP or pre-filed draft is subject to public disclosure (in many cases) so prospective investors can review it.
• The DRHP includes sections on the issuer’s business, capital structure, financial statements, risk factors, management, promoters, use of proceeds, and underwriter/merchant banker details.

3. SEBI/Exchange Review and Observation Letter

After filing the DRHP, SEBI (and the exchanges) review the document and may issue queries, ask for clarifications, or request additional disclosures. This is known as the “Observation” phase. 

• The company must respond to SEBI’s queries and file the updated DRHP or modifications.
• Once accepted, SEBI issues an Observation Letter, which is valid for a certain period (e.g., 12 months) within which the IPO should launch.
• The exchange also grants in-principle approval for listing (subject to conditions).
• The observation period can take 4-8 weeks or more, depending on the complexity.

4. Red Herring Prospectus (RHP) / Final Prospectus

Once SEBI’s observations are resolved, the company finalizes the public issue: 

• The “Red Herring Prospectus” (RHP) is prepared. It includes the final issue size, price range (in a book-building IPO), allotment details, timelines, bankers, and other final disclosures.
• This is filed with the Registrar of Companies (RoC), SEBI, and the exchanges.
• The RHP is made available to the public (brochures, websites) so potential investors can study it.
• The company sets the price range (e.g., ₹X to ₹Y per share) and schedules the bidding date.
• In book-building, anchor-investor allocation occurs a day early, and then general public bidding begins.

5. Marketing, Roadshows and Book-Building

In this phase: 

• The issuer, along with the merchant banker, conducts roadshows (domestic and sometimes international) to pitch to institutional investors (QIBs — Qualified Institutional Buyers), HNIs (High Net Worth Individuals), and occasionally the retail segment.
• Investors will ask questions and seek clarifications; the company may present its business plan, growth outlook, and comparative data.
• The book-building mechanism allows investors to bid within the price range; demand is gauged; anchor investors subscribe a day early, and then bidding opens to the public.
• Marketing is crucial: investor perception, oversubscription, and valuation expectations are shaped here.

6. Bidding, Allotment and Refunds

• The IPO opens for subscription (often for 2-3 working days), and investors (retail, HNI, NII – non-institutional investors) apply via the ASBA/UPI mechanism.
• After the closing date, the final issue price is set (in book-building), and the allotment process starts.
• Shares are allocated to successful applicants based on category-wise allocations (QIB, HNI, Retail, etc.).
• If oversubscribed, there may be rationing, lotteries, or proportional allotment (depending on the category) according to SEBI norms.
• Refunds are processed for unsuccessful applications, and UPI blocks/unblocks are managed.
• Allotment details are filed with the exchange and Registrar.
• Shares are credited to investor DEMAT accounts.

7. Listing on Stock Exchange & Trading Begins

• Typically within 6 working days of allotment or shortly after, the issuer’s shares are listed on the exchange (NSE/BSE).
• On listing day, shares start trading publicly. The opening price is determined by market demand, which may differ significantly from the issue price.
• After listing, the company becomes a “listed company” and must meet ongoing disclosure obligations, quarterly financial reporting, corporate governance standards, etc.

8. Post-Listing Compliance and Obligations

• The company must follow ongoing rules under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) — including quarterly reporting, shareholding disclosures, related-party transactions, and corporate governance.
• Promoters may face lock-in periods during which they cannot sell certain portions of their shares (as outlined in the RHP).
• The company should manage investor relations and ensure clear financial reporting and internal controls.
• Failure to comply may result in penalties, suspensions, or a negative perception among investors.

Timeline & Typical Durations

The total time from decision to listing for a main board IPO in India typically ranges from 6 to 12 months.
Here is a breakdown of typical durations:

Phase	Approximate Duration
Pre-IPO preparation (due diligence, advisor appointments)	4-8 weeks (sometimes more)
DRHP preparation & filing	1-4 weeks
SEBI/Exchange review & observations	4-8 weeks or more (depending on queries)
RHP finalisation & marketing	2-4 weeks
Bidding & allotment	2-3 working days
Listing on exchange	~6 working days after allotment
Post-listing formalities	ongoing

Notes:

• If the company uses the “pre-filing confidential DRHP” route, the public disclosure part may be delayed and timing may shift.
• Delays can occur due to regulatory queries, market conditions, pricing issues, or internal readiness.

Cost, Fees and Underwriting Considerations 

Launching a main board IPO comes with significant costs and commitments that the company and its promoters need to consider.

Fees and Professional Costs 

• Merchant banker and book-running lead manager fees (fixed plus success fee).
• Legal advisor fees.
• Auditor costs for additional audits and disclosures.
• Registrar and exchange listing fees.
• Advertising, roadshow, and marketing expenses.
• Printing and distribution of the prospectus (which is often online these days).
• Underwriting commissions (if underwriting is utilized).

Underwriting and Risk Commitments 

• For main board IPOs, underwriting is optional if a substantial portion is given to QIBs (Qualified Institutional Buyers). In SME issues, it is often mandatory, but the rules are more relaxed for the main board.
• Promoters may commit to lock-in periods on their shareholdings (e.g., 1 year or 3 years) depending on the issue structure and disclosures.
• The issue must be fully subscribed; otherwise, the company may face refund commitments.

Use of Proceeds and Financial Discipline 

• The RHP must clearly specify how the raised funds will be used (for expansion, debt repayment, working capital, acquisitions, etc.).
• There is regulatory scrutiny to ensure the money is not used for promoter or related-party loans or irrelevant expenses.
• Internal controls and governance must be improved.

Key Regulatory and Disclosure Requirements 

Since a main board IPO places a company under close public and regulatory scrutiny, the disclosure framework is vital. 

Risk Factors and Business Disclosures 

• The DRHP/RHP must include a detailed “Risk Factors” section, outlining all material risks: market, financial, regulatory, operational, litigation, etc.
• The business overview must cover history, business model, competitive landscape, future outlook, revenue model, and management structure.
• Promoters and management biographies, shareholding pattern, material agreements, and related-party transactions must be disclosed.

Financial Statements 

• Past audited financials (typically three years) must be included with notes and the auditor’s report.
• Financial discipline requires clear methodologies, accounting policies, and disclosures about carve-outs or subsidiaries, if any.
• For newly profitable companies (or those without a long history), additional disclosures may be necessary.

Governance and Promoter/Management Disclosures 

• Promoter contribution and lock-in: Promoters typically must hold a minimum percentage post-issue and may need to lock in for a specified time.
• Related-party transactions must be clearly disclosed, and governance around them must be strong.
• Employee stock options (ESOPs) disclosures should be included, especially if promoters are eligible. SEBI has eased some rules for ESOPs for start-ups and founders.
• Dematerialization: The company must ensure that shares are in demat form or facilitate the required demat conversion before listing.

Use of IPO Proceeds 

• The RHP must clearly list the objectives of the issue and how the funds will be used.
• Use of funds for general corporate purposes (GCP) may be restricted under certain conditions or require disclosure.
• Avoid using proceeds to repay promoters or group companies in certain situations; disclosure is required, or such uses may be restricted.

Listing and Post-Listing Compliance 

• Once listing approval is obtained, the shares must meet the minimum public shareholding required by exchange rules and listing criteria.
• After listing, the company must comply with ongoing obligations under SEBI LODR (Listing Obligations and Disclosure Requirements) regulations, which include quarterly financial reports, annual reports, takeover disclosures, related-party transactions, and corporate governance reports.
• Insider trading regulations, share transfer restrictions, and preferential allotments (if any) must follow SEBI norms.

Pre-Filing Route – Confidential Filing Option 

• In November 2022, SEBI introduced an amendment allowing for confidential pre-filing of draft offer documents by main board issuers.
• Under this route, a company can file a draft offer document with SEBI and exchanges without initially disclosing it to the public, preserving confidentiality of business information until a decision is made.
• This option can benefit companies that are in early planning stages, seek flexibility, or have competitive sensitivities.
• Once they decide to proceed, the final prospectus is then disclosed and marketed.

Advantages and Challenges of a Main Board IPO 

Advantages 

• Large-scale capital access: Public issues allow companies to raise significant funds from institutional and retail investors.
• Improved credibility and visibility: Listing on major exchanges enhances the brand, boosts investor confidence, and may promote business growth, partnerships, and acquisitions.
• Liquidity and exit options: Founders and promoters often get an exit path (offer for sale) or partial liquidity, while new investors gain shares that trade publicly.
• Better valuation: Public markets typically assign higher valuations (subject to market conditions) compared to private funding.
• Employee retention and incentives: A public listing makes ESOPs and trading in publicly listed shares more meaningful for employees.

Challenges 

• High cost and time-consuming process: Preparing, regulatory filings, advisor fees, and marketing expenses can be significant.
• Strict disclosure and compliance: Once listed, the company faces rigorous regulatory oversight, public scrutiny, and corporate governance norms.
• Market risk and listing risk: Conditions at the time of listing may negatively affect pricing; even a well-managed company may see poor listing performance.
• Lock-in and promoter restrictions: Promoters’ shareholding may be locked-in, limiting flexibility.
• Public company obligations: Companies must manage investor relations, make quarterly disclosures, and balance short-term market expectations with long-term strategy.

What Investors Should Watch in a Main Board IPO 

For retail or institutional investors thinking about participating in a main board IPO, here are key factors to consider: 

1. Read the DRHP/RHP carefully

   – Look closely at risk factors, business model, competitive edge, financials, and how funds will be used. 

   – One article highlights, “If you are looking for listing or short-term gains, then reading the prospectus does give us a brief idea about the Company and the industry it comes under along with the different challenges the company or the industry is facing.” 

2. Understand the valuation and pricing band

   – In book-building issues, the price band shows market expectations. 

   – Compare similar companies, industry growth, profitability, and actual issue size. 

   – Oversubscription levels may hint at demand. 

3. Allocation categories and chances of allotment

   – There are usually minimum lot sizes and different quotas for QIBs, HNI/NII, and Retail. 

   – In oversubscribed IPOs, allotment may involve lotteries or proportional allotment based on category. For instance, “For main board IPOs… it is lottery basis for HNI…” 

4. Lock-in, promoter behavior, and corporate governance

   – Check how much of the promoter’s stake will be locked in. 

   – Examine related-party transactions: Are they clean? Is there transparency? 

   – The audit track record, management credibility, and governance practices are very important. 

5. Use of proceeds

   – Are the funds being used for growth initiatives, debt repayment, or promoter benefits? Growth-oriented usage is preferred. 

   – If a large portion is meant for general corporate purposes or less tangible uses, that can be a warning sign. 

6. Listing day and after-market performance risk

   – Market sentiment can influence listing gains or losses, regardless of fundamentals. 

   – Post-listing performance relies on business execution, not just hype. 

   – Understand that investing in an IPO carries risks, like lock-in expiry, promoter exit, and macroeconomic challenges. 

7. Post-listing obligations

   – Check if the company has strong systems for investor communications, compliance, and disclosures. 

   – A listed company’s reputation and investor relations significantly affect long-term value. 

Recent Regulatory Changes and Trends 

The Indian IPO market has seen significant regulatory updates that affect main board IPOs. 

– In November 2022, SEBI changed its ICDR (Issue of Capital and Disclosure Requirements) regulations to allow a pre-filing confidential drafting route for main board IPOs. 

– SEBI is also focusing on improving governance standards for listed companies, dematerializing shares, updating ESOP disclosure norms, and tightening rules on the use of funds. For example, “Under the existing regulations, promoters are ineligible to hold or be granted share-based benefits, including ESOPs… SEBI has eased this for start-ups/founders.” 

– Market sentiment and the IPO pipeline are strong, with several companies recently filing DRHPs for large main board issues. 

– The allotment process is under review, especially to ensure fairness for retail and HNI investors and transparency in disclosures. Discussions on Reddit reveal investor frustration and demand for better clarity. 

 

Common Mistakes, Pitfalls, and How to Avoid Them 

Here are some common pitfalls companies and investors face in main board IPOs—and how to navigate them. 

 

For companies (issuers) 

– Under-preparation: Rushing to file the DRHP without sufficient due diligence can prompt SEBI queries and cause delays. 

  Tip: Allow enough time for legal and financial audits and fix internal systems beforehand. 

– Poor disclosure or weak corporate governance: This can hurt investor confidence and pricing. 

  Tip: Ensure transparency in related-party transactions, provide clean audit certificates, and maintain a strong board and management. 

– Over-ambitious valuation: Setting a high price band without market demand can lead to a weak listing or undersubscription. 

  Tip: Work with advisors to compare peer valuations and assess demand. 

– Inadequate marketing or investor outreach: This is especially important for retail and HNI segments. 

  Tip: Develop a strong roadshow strategy, investor education, and marketing materials. 

– Misuse of proceeds: Investing funds in unrelated assets or for promoter benefits can create post-listing risks. 

  Tip: Clearly define how funds will be used and align them with the growth strategy; avoid risky or vague investments. 

 

For investors 

– Ignoring the prospectus: Many retail investors apply based solely on “listing gain hype” without reading the DRHP/RHP. 

  Tip: Read the document—understand the business, risks, financials, and use of funds. 

– Assuming guaranteed listing gain: The market can be unpredictable; listing day demand can vary. 

  Tip: View IPOs as medium-to-long-term investments unless you are sure of a quick gain. 

– Over-applying without understanding allocation norms: In oversubscribed IPOs, allocation may be limited even for large applicants. 

  Tip: Understand the allotment process (retail/HNI/NII categories, minimum lots) and apply sensibly. 

– Ignoring post-listing dynamics: Some companies may list successfully but struggle afterward due to execution problems. 

  Tip: Monitor business performance post-listing; focus on fundamentals, not just the listing day. 

– Neglecting lock-in expiry risk: The end of lock-in periods for promoters or anchor investors can lead to sell-offs and price pressure. 

  Tip: Review lock-in details in the RHP and the shareholding schedule after listing. 

Case Example (Illustrative) 

While this is not a deep case study, it illustrates a hypothetical or real-inspired scenario. 

Company “ABC Ltd.” wants to raise ₹500 crore through a main board IPO. The steps they follow: 

1. Decide on the capital raise and share offering structure: for example, ₹300 crore fresh equity plus ₹200 crore offer for sale (OFS).
2. Appoint merchant bankers, legal advisors, and auditors; convert to a public limited company if necessary; audit the last three years of accounts.
3. Prepare the draft red herring prospectus (DRHP) and file it with SEBI and exchanges. The DRHP includes a business overview (for example, in the manufacturing sector), risk factors (like raw material price changes, exchange rate risk, and regulatory approvals), promoters’ background, financial statements, and more.
4. SEBI requests clarifications on related-party transactions and manufacturing capacity; the company responds and then receives an observation letter.
5. Prepare the red herring prospectus (RHP) with a price band (for example, ₹240 to ₹260 per share), allotment schedule, details of anchor investors, and bidding period.
6. Conduct roadshows for institutions, high-net-worth individuals (HNWIs), and media; demonstrate strong interest; anchor investors subscribe.
7. Public bidding opens for three working days, with application lots (for example, 50 shares per lot).
8. Subscription is ten times oversubscribed in retail and twenty times in HNI. Allotment is done via lottery for the HNI category (since oversubscription is greater than five times) and proportionally for retail allotment.
9. Shares list on day X at ₹310 per share (19% premium) and start trading. After listing, the company continues to make quarterly disclosures and monitors the expiration of the shareholding lock-in for promoters (for example, one year).
10. Over the next twelve months, the company expands, uses funds for capital expenditures, and publishes strong results, generating investor returns beyond the initial listing.

This example shows typical flows, although every IPO is unique. 

 

Verdict: Is a Main Board IPO Right for Your Company? 

If you represent a company considering going public through a main board IPO in India, you should ask: 

• Do you have a strong enough business model, governance structure, and financial track record?
• Is your management ready for the obligations of a public company?
• Are you comfortable with full transparency, regulatory scrutiny, and investor communications?
• Do you need the scale of capital and visibility that a main board listing provides? Or is a smaller option, like an SME board or private placement, more suitable?
• Are market conditions favorable? Timing is crucial for IPOs.
• Are you prepared for the costs, time commitment, and post-listing compliance?

 

If you can answer “yes” to most of these questions, then a main board IPO may be a good strategic move. If not, you might want to develop further, improve readiness, and consider it later. 

 

Conclusion 

A main board IPO in India is a significant step for a company, bringing both opportunity and responsibility. It opens access to public markets, capital, and visibility but also requires strong disclosure, governance, and ongoing commitment to investor relations. 

For investors, understanding the process from the DRHP to listing and beyond is crucial for making informed decisions rather than getting caught up in listing-day excitement. 

 

As the Indian capital markets evolve, with regulatory improvements such as confidential pre-filing of offer documents and stricter governance norms, both companies and investors need to stay attentive, well-informed, and disciplined. 

In short, view the IPO not just as an event, but as the start of a longer journey as a public company.