SEBI Amends SME IPO Rules: Key Changes and Impact One more step towards Good Governance and towards creating healthy Equity Market 1. Profitability Requirement Introduced - SMEs planning to launch an IPO must have a minimum EBITDA of ₹1 crore in at least 2 out of the last 3 financial years. 2. Cap on Offer-for-Sale ( OFS ) - OFS by selling shareholders is capped at 20% of the total issue size. Selling shareholders cannot offload more than 50% of their existing holdings. 3. Promoter's Lock-in Period - Promoter's shareholding over Minimum Promoter Contribution ( MPC ) will be subject to a phased lock-in: 50% of excess holding released after one year. Remaining 50% released after two years. 4. Alignment of Allocation Methodology for NIIs - Non-Institutional Investors ( NIIs ) allocation in SME IPOs will now follow the same approach as main-board IPOs to ensure uniformity. 5. Increase in Minimum Application Size Minimum application size increased to two lots to...