NSE and BSE Issue New Rules for SME IPOs, Effective from July 1, 2025

The National Stock Exchange (NSE) and BSE (formerly Bombay Stock Exchange) released a circular on June 18, 2025, announcing changes in the IPO bidding process for Small and Medium Enterprises (SME). The new changes to the SME IPO rules are in accordance to the amendments to SEBI Regulations and will take effect from July 1, 2025. These changes are designed to enhance transparency, efficiency, and investor participation in the SME segment of the market.

Read along to understand the change in bidding processes and SME IPO rules.

New Eligibility Conditions for SME IPO - What’s Changing? 

Given below are the new changes implemented in the bidding process for SME IPOs  as stated in the NSE and BSE Circulars:

• The Existing Retail Individual Investor category has been replaced by Individual Investor, who can apply for up to 2 lots with a minimum application size of ₹2 lakhs or above.
• The minimum bid size for Individual Investors shall be 2 lots, with a minimum application size of above ₹2 lakhs.
• Qualified Institutional Buyers (QIBs) & Non-Institutional Investors (NIIs) can apply for more than 2 lots.
• Placing bids on the Cut-off price shall not be applicable/available to any category of bidding.
• No modification or cancellation shall be applicable to any category of bidding.
• The bidding window for all Categories on the last day of the IPO shall close at 4:00 PM.
• UPI Mandate Acceptance/Confirmation shall be available until 5:00 PM on the last day of bidding.

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In case of reserved categories, the following changes shall be applicable:

• Investors falling under the employee category can apply for a minimum of 2 lots, requiring a minimum application size of above ₹2 Lakhs and in multiples of the lot size not exceeding ₹5 Lakhs.
• Investors falling under the shareholder and policyholder categories can apply for a minimum of 2 lots, with a minimum application size of ₹2 Lakhs or above.

Refer to the table below to get a better understanding on the investor categories and limits as per the regulatory changes:

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The exchange circulars also stated - “The existing and the new bidding processes for SME IPOs will be available for issues opening on or before June 30, 2025. In case of any spillover for the SME IPOs, the same shall be extended up to July 11, 2025. Post this date, only the aforementioned new process shall be mandatorily applicable to all SME IPOs opening on or after July 01, 2025.”