Explain the conditions with regard to Net Tangible Assets, Average Profit and the Net Worth which needs to be complied by an issuer making an Initial public offer.

Issuer eligibility for making an IPO An issuer shall be eligible to make an IPO only if: the issuer has net tangible assets of at least ₹ 3 crores on a restated and consolidated basis, in each of the preceding three full years (of 12 months each) of which not more than 50% is held in monetary assets; However, if more than 50% of the net tangible assets are held in monetary assets, the issuer has utilized or made firm commitments to utilize such excess monetary assets in its business or project. This limit of 50% shall not apply in case of IPO is made entirely through an offer for sale. the issuer has an average operating profit of at least ₹ 15 crores, calculated on a restated and consolidated basis, during the three preceding years (of 12 months each) with operating profit in each of the three preceding years; the issuer has a net worth of at least ₹ 1 crore in each of the preceding three full years, (of 12 months each) calculated on a restated and consolidated basis.