The minimum promoters' contribution in an IPO is normally locked in for:
Profitability route: an issuer can make an IPO if it has, on a restated and consolidated basis: - Net tangible assets of at least ₹3 crore in each of the last three full years, of which not more than 50% in monetary assets (unless the excess is committed to the business, or the IPO is entirely an offer for sale); - Average operating profit of at least ₹15 crore over the last three years, with a profit in each year; - Net worth of at least ₹1 crore in each of the last three years; - if its name changed in the last year, at least 50% of revenue from the activity in the new name. QIB route: an issuer that does not meet these can still do an IPO through book building if it allots at least 75% of the net offer to QIBs, refunding all money if it cannot. Companies with superior voting (SR) shares for founders can list ordinary shares on the main board subject to ICDR conditions.
Exam trap: IPO grading assesses fundamentals; it does not say whether the price is right or whether to apply.