June 04, 2016: Regulator Sebi plans to relax norms by next month to make startup listing platform more attractive and to help them tap this avenue for raising funds as also to give an easier exit opportunity to their existing investors including from abroad.
The platform is aimed at providing easier exit options for angel investors, domestic and foreign venture capital funds and private equity players, who have invested in over 3,000 startups, including in new technology space, in India.
Sebi has decided to tweak the regulations to make them more attractive after incorporating some fresh suggestions from the industry and market players as the platform has failed to attract a single startup for listing so far .
Sebi’s board is likely to discuss the fresh changes in its board meeting next month. Sebi Chairman UK Sinha, who is visiting the US including Silicon Valley to hard-sell India growth story among the investors there, had said in a recent interaction that the regulations are being looked into again.
Sinha said, “What we have noticed is that most of the companies that have got listed in past one year or so are in new technology sectors or are technology-driven businesses. This gives us an idea about the direction in which our economy is moving.”
The Institutional Trading Platform (ITP) is yet to see any start-up listing ever since an easier set of compliance and disclosure requirements was notified in August 2015. Under the rules, start-ups can list on the separate ITP of stock exchanges such as BSE and NSE.
Sinha said, “What we have noticed is that most of the companies that have got listed in past one year or so are in new technology sectors or are technology-driven businesses. This gives us an idea about the direction in which our economy is moving,” Sinha said.
The Institutional Trading Platform (ITP) is yet to see any start-up listing ever since an easier set of compliance and disclosure requirements was notified in August 2015. Under the rules, start-ups can list on the separate ITP of stock exchanges such as BSE and NSE.
“Not single company has got listed on this so far, although we formulated the rules after very very detailed consultation with the industry and market players. We are again looking at revising the norms as there have been some fresh suggestions from the industry,” he said.
On whether some changes are in offing in startup listing regulations, Sinha had replied in affirmative. “Yes, we have received some suggestions that we will study and incorporate them appropriately.”
Asked about the timeframe, he said, Sebi may take up the matter in its next board meeting in July.
Under the notified rule, minimum trading lot and the minimum application size have been kept at Rs 10 lakh so that only sophisticated and large investors come in.
For their listing, Sebi had also relaxed the mandatory lock-in period for promoters and other pre-listing investors to six months, as against three years for other companies.
Besides, the disclosure requirements for these companies have been relaxed. The companies can, however, graduate to the main platform later and the small investors can also invest at that time.
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