FAQs
Following ICDR Regulations are not applicable to SME IPO:- 6(1), 6(2), 6(3), 7, 8, 9, 10, 25, 26, 27, 49(1).
- ♦100% underwriting of the issue.
- ♦Merchant Bankers need to underwrite 15% from their own account.
- ♦Merchant Bankers are required to undertake market making for a period of 3 years.
Regulation 26 is not applicable to SME IPO. Hence, IPO Grading is not compulsory for listing on SME Exchange.
- ♦SEBI has issued a circular vide dated 21st February, 2012 for standardized lot size for SME Exchange.
- ♦The Regulation warrants that the odd lots can be sold only to the market makers and the investor has to give the declaration stating that he is selling all the odd lot shares of the particular scrip. This is to minimize the odd lots in the system.
The tax benefits are immense. The unlisted shares will attract short term capital gains (STCG) tax upto 30% and long term capital gains tax (LTCG) of 20%. Whereas in listed securities, the STCG tax is 15% and LTCG tax is 10% respectively, provided an investor has paid Securities transaction Tax.