A PVT. LTD. COMPANY WAS INCORPORATED IN 2008. AT PRESNT PAID UP CAPITAL IS RS. 4 CRORE. THE CO. WANT TO RAISE FUNDS THROUGHT IPO. CAN IT RAISE FUNDS THROUGHT IPO BY CONVERTING ITSELF INTO PUBLIC LTD. COMPANY. IF YES THEN WHAT ARE THE REQUIRMENTS FOR IT.
IS IT IS NECESSARY FOR IPO TO COMPLETE 5 YEARS PERIOD AFTER INCORPORATION.
18 March 2011
SEBI has stipulated the eligibility norms for companies planning an IPO which are as follows: Yes the Company has to be converted from private to public for raising funds through IPO.
There is no specific necessity for completion of 5 years but the following conditions need to be fulfilled:
a) Net tangible assets of at least Rs. 3 crore for three full years b) Distributable profits in at least three years c) Net worth of at least Rs. 1 crore in three years d) The issue size should not exceed 5 times the pre-issue net worth e) If there has been a change in the company’s name, at least 50 per cent of the revenue for preceding one year should be from the new activity denoted by the new name
CAclubindia
