Securities And Exchange Board Of India - Subsection
Section 26(1) in Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009
(1)An issuer may make an initial public offer, if:(a)it has net tangible assets of at least three crore rupees in each of the preceding three full years (of twelve months each), of which not more than fifty per cent. are held in monetary assets:Provided that if more than fifty per cent. of the net tangible assets are held in monetary assets, the issuer has made firm commitments to utilise such excess monetary assets in its business or project;(b)it has a track record of distributable profits in terms of section 205 of the Companies Act, 1956, for at least three out of the immediately preceding five years:Provided that extraordinary items shall not be considered for calculating distributable profits;(c)it has a net worth of at least one crore rupees in each of the preceding three full years (of twelve months each);(d)the aggregate of the proposed issue and all previous issues made in the same financial year in terms of issue size does not exceed five times its pre-issue net worth as per the audited balance sheet of the preceding financial year;(e)if it has changed its name within the last one year, at least fifty per cent. of the revenue for the preceding one full year has been earned by it from the activity indicated by the new name.
