The final norms, which would be presented for approval from the Sebi’s board later this month, have been finalised after taking into account suggestions from all stakeholders to the draft guidelines released in March, sources said.
Asking technology startups founded by Indians to remain within the country, Sebi Chairman U K Sinha, last weekend, promised an easier set of regulations for them to get listed and raise funds from the domestic stock market.
“We are going to take a decision very soon in this regard. We are looking into how to make it easier for them to raise money,” Sinha had said.
The new norms are expected to help startup companies raise funds within India and stop their flight to overseas markets.
“What is happening today is most of these startups, who have been reasonably successful, they are getting attracted to the New York Stock Exchange or Singapore Stock Exchange,” Sinha had said.
“They do not want to get listed here for varieties of reasons. They are getting attracted to foreign markets. Our effort is to provide a mechanism that they get listed in India itself, for the benefit of the country and for the benefit that the country’s startups remain within the country,” he had added.
Under the new norms, the entire pre-issue capital is expected to be locked-in for a period of six months for all shareholders.
At present, promoters are required to offer a minimum of 20 per cent of post-issue capital as lock-in for a period of three years.
Besides, Sebi is expected to make easier disclosure norms for startup listings. While filing the draft offer document with the capital market watchdog, such firms will only need to disclose broad objectives in line with the major international jurisdictions.
Sebi has already made it easier for the Small and Medium Enterprises (SMEs) to raise money from capital markets.
“SMEs are primarily dependent on bank loans today and we know that banks have their own limitations.
“We have created separate platforms for SMEs at the two top exchanges BSE and NSE. We have balanced the requirement of safeguarding the investors and also facilitating the fund requirement of the SMEs