Shanti Inorganics Limited Faces ₹100 Crore NSE Migration Tests

Shanti Inorganics would need to meet NSE Emerge migration rules that include more than ₹100 crore of revenue from operations in the latest financial year, at least ₹75 crore of net worth and three years on the SME platform. The policy effective May 1, 2025 also requires ₹100 crore average equity capitalisation and positive cash accruals from operations in two of the preceding three financial years.

What must Shanti Inorganics meet to move from NSE Emerge to the main board?

Shanti Inorganics must satisfy financial, listing-history, ownership and shareholder-base conditions before applying to move from NSE Emerge, the NSE SME platform, to the NSE main board. Under NSE Circular No. NSE/CML/67671 dated April 24, 2025, effective May 1, 2025, paid-up equity capital must be at least ₹10 crore and average equity capitalisation must be at least ₹100 crore.

The financial threshold is not limited to market value. Shanti Inorganics must report revenue from operations of more than ₹100 crore in the last financial year and must have positive cash accruals from operations in at least two of the three financial years preceding the migration application. The prospectus identifies the measure in parentheses as earnings before interest, depreciation and tax, or EBDIT.

The NSE rules also require net worth of at least ₹75 crore, calculated under the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations, 2018. Shanti Inorganics must additionally have been listed on the NSE SME platform for at least three years, meaning that meeting the revenue threshold in one year would not by itself permit an immediate main-board migration.

How is the ₹100 crore NSE capitalisation threshold calculated?

Shanti Inorganics would be assessed using a three-month average-price formula rather than a single-day market value for the ₹100 crore capitalisation condition. NSE defines capitalisation for this purpose as the post-issue number of equity shares multiplied by the average of the weekly high and low closing prices of the relevant shares during the three months preceding the migration application date.

That formula makes the requirement dependent on both the post-issue share count and quoted prices over the preceding three months. It differs from the ₹10 crore paid-up equity-capital threshold and the more than ₹100 crore revenue-from-operations threshold, which concerns the last financial year. Each test applies alongside the ₹75 crore net-worth condition.

The policy therefore uses separate measures for migration eligibility: paid-up capital of at least ₹10 crore, average equity capitalisation of at least ₹100 crore, revenue from operations above ₹100 crore in the last financial year, and net worth of at least ₹75 crore. The positive-cash-accrual condition is a multi-year test because it applies to at least two of the three financial years before the application.

How long would Shanti Inorganics need to remain on the SME platform?

Shanti Inorganics must be listed on the NSE SME platform for at least three years before making a migration application under the policy effective from May 1, 2025. The three-year condition is additional to, rather than an alternative to, the financial, ownership and compliance requirements.

The prospectus states that Shanti Inorganics' equity shares are proposed to be listed on NSE Emerge. The issue is being made under Regulation 229(2) of Chapter IX of the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations, which permits an issuer with post-issue paid-up capital above ₹10 crore and up to ₹25 crore to issue shares to the public and propose listing on NSE Emerge.

NSE Emerge listing also carries a separate market-making requirement. The market maker for Shanti Inorganics' issue is to ensure compulsory market making through NSE-registered market makers for a minimum of three years from the listing date. The two three-year periods have different functions: one is a market-making arrangement, while the other is NSE's minimum SME-listing history before main-board migration.

What ownership and shareholder conditions would Shanti Inorganics face?

Shanti Inorganics' promoters and promoter group must hold at least 20% of the company at the time of a migration application. In addition, promoter holding at the application date cannot be lower than 50% of the shares held by promoters on the SME listing date, creating a retention test linked to the original listed holding.

Shanti Inorganics must also have at least 500 public shareholders on the last day of the quarter preceding its application date. This is separate from the promoter-holding conditions: the policy requires the minimum 20% promoter-and-promoter-group stake, the 50% retention measure and the 500-public-shareholder threshold.

The migration tests are assessed at the eventual application date, rather than solely at the time of the SME listing. As a result, the promoter stake and public-shareholder count must continue to meet the NSE conditions after the required three-year SME-listing period and when the application is made.

Which regulatory and compliance matters could prevent migration?

Shanti Inorganics cannot have specified insolvency, winding-up or regulatory problems when it applies for migration. NSE requires that no proceedings under the Insolvency and Bankruptcy Code, or IBC, have been admitted against the issuer and promoting companies, and that no winding-up petition has been admitted by the National Company Law Tribunal or under the IBC.

NSE also requires no material regulatory action, such as suspension of trading, against the applicant company and its promoter during the preceding three years. Shanti Inorganics, its promoter and subsidiary company must not be debarred by the Securities and Exchange Board of India, and no director may be disqualified or debarred by a regulatory authority. The applicant must also have no pending investor complaints in SCORES, the Securities and Exchange Board of India complaints redressal system.

Further restrictions concern trading surveillance and creditor obligations. NSE requires a two-month cooling-off period after a security exits the trade-to-trade category or another surveillance action imposed by an exchange where the security is actively listed. It also requires no default in interest or principal payments to debenture, bond or fixed-deposit holders by the applicant, its promoter or subsidiary company.

Conclusion

Shanti Inorganics' proposed NSE Emerge listing is not an automatic route to the main board. A future application would require cumulative compliance with more than ₹100 crore of latest-year revenue from operations, ₹75 crore of net worth, ₹100 crore of average equity capitalisation and ₹10 crore of paid-up equity capital, as well as positive cash accruals from operations in two of the preceding three financial years and three years of SME listing.

The next matters to watch are those set by NSE's May 1, 2025 policy: whether Shanti Inorganics completes three years on the SME platform, maintains the required promoter stake and 500 public shareholders, and avoids the stated insolvency, regulatory, surveillance and payment-default restrictions. The prospectus does not state that Shanti Inorganics has applied for, or qualifies for, migration to the NSE main board.