Mainboard IPO Readiness: A 24-Month Finance and Governance Plan

Most IPO timelines I am shown start when the merchant banker is appointed. By then, the decisions that decide how smooth the process will be have already been made, or missed. Whether the finance team can close the books quickly, whether the auditor can sign a restatement, whether the board looks like a listed company's board: these take longer to fix than the DRHP takes to draft.

This is the 24-month plan I use for the finance and governance side of a main board IPO. It sits alongside our 18-month pre-IPO structuring note, which covers the cap table and share capital; this one covers people, numbers, systems and the board. Treat the months as a sequence, not a deadline.

Months 24 to 18: diagnose and hire

Start with an honest readiness assessment. Compare today's finance function, controls, governance and records against what a listed company needs, and list the gaps with owners and dates. Gaps in people and systems often matter more than the eligibility arithmetic.

The two hires that matter most are a CFO who has worked through a listed company's reporting cycle and a qualified company secretary. If the full-time CFO hire has to wait, a virtual CFO can build the monthly close, the MIS and the audit relationship in the meantime, so the incoming CFO inherits a working system rather than a project.

Review the statutory auditor now. The restated financial information in the offer document must be examined by an auditor with a valid peer review certificate from ICAI. Changing auditors late raises questions; changing early gives the new auditor full years to own.

Months 18 to 12: accounting and closing discipline

A company in the process of listing on the main board comes within the Ind AS rules, and the offer document needs restated financial information for three years. If you report under Indian GAAP today, plan the Ind AS transition with the auditor now; revenue recognition, leases, financial instruments and consolidation are common areas where numbers move.

Then fix the close. A listed main board company publishes quarterly results within 45 days of the quarter end and annual results within 60 days of the year end, with an auditor's limited review or audit. If your books take two months to close today, you are not ready. Build a monthly close with reconciliations, a fixed asset register and inventory records an auditor can test.

Choose the KPIs you will disclose. KPIs in the offer document must be certified and approved by the audit committee, and continue to be reported after listing for a period. Pick metrics your systems can compute consistently, not the ones that look best in a pitch deck.

Months 15 to 9: controls, internal audit and tax hygiene

Internal financial controls become a board and auditor matter for a listed company. Document the key processes, from order to cash, procure to pay, payroll and treasury, test them and fix design gaps. Appoint an internal auditor, in-house or outsourced, reporting to the audit committee.

Clean up tax and statutory compliance in parallel: GST reconciliations, TDS defaults, open assessments, provident fund and ESI payments, and any related party pricing that would not stand up to scrutiny. Every open matter becomes a disclosure, so close what you can and document what remains.

Months 12 to 6: build a listed-company board

A listed company needs independent directors, an audit committee, a nomination and remuneration committee and a stakeholders relationship committee, and depending on size a risk management committee, with composition rules under LODR and the Companies Act. Appoint independent directors early enough that they know the business before they approve the offer document.

Adopt the policies a listed company needs: related party transactions, materiality of events, the insider trading code, a whistle-blower mechanism and, for the offer document, materiality policies for group companies and litigation. Then hold board and committee meetings on a listed-company rhythm for a few quarters before filing, with proper agendas and minutes.

Arrange directors and officers liability insurance as well. LODR requires it for independent directors in the larger listed companies, and good candidates will ask about it anyway.

Choosing the book running lead managers

For a main board issue the lead manager must be a SEBI-registered merchant banker permitted to manage such issues; under the 2024 amendments to the merchant banker regulations, that is a Category I merchant banker. Larger issues often appoint more than one book running lead manager, dividing responsibilities through an inter-se allocation.

I look at four things: the bank's record on issues of similar size and sector, its institutional distribution for the anchor and QIB books, its research and after-market support, and the team that will actually work on your issue. Fees usually combine fixed and success-linked parts plus expenses, so compare the full cost of the issue, not just the headline percentage.

Months 6 to 0: dry runs and filing

In the last stretch, run at least one full quarterly close as if you were listed, with board-approved results inside the listed-company timeline and the auditor's review. Complete due diligence and finalise the restated financial statements with the peer-reviewed auditor.

Then the DRHP is filed and opened for public comments for 21 days. SEBI's observations follow, and the issue must open within 12 months of them. If the readiness work was done, this phase is about marketing, not repairs.

Frequently asked questions

How long does it take to prepare for a mainboard IPO?

For a company starting from a typical private company finance function, I plan around 18 to 24 months of readiness work before filing, followed by the SEBI review period. Companies that already report to listed-company standards can move faster.

Do we need Ind AS before a mainboard IPO?

In general, yes. A company in the process of listing on the main board comes within the Ind AS rules, and the offer document needs restated financial information on that basis. SME platform companies are outside the mandatory Ind AS requirement.

When should we appoint independent directors?

Well before filing, so they attend several board and committee meetings and understand the business before they approve the offer document and the restated financials.

Can a virtual CFO help with IPO readiness?

Yes, for the build phase: monthly close, MIS, audit coordination, KPI definitions and controls documentation. For the listing itself, the company needs a whole-time CFO as key managerial personnel.

Related guides

• Pre-IPO structuring: the 18-month plan
• Virtual CFO for startups
• MIS design for growth-stage startups
• Our advisory services