Here’s a piece of news which can act as a huge breather for several budding Indian startups and entrepreneurs. Securities and Exchange Board of India or SEBI, as it is famously known, has decided to relax its startup listing norms by next month i.e. July.
These changes are expected to help the startups make a better use of this avenue for the purpose of raising funds, and will additionally be also providing an easier exit opportunity to the already existing investors including for the ones from abroad.
For the unaware, the startup listing platform is aimed at providing private equity players, domestic and foreign venture capital funds, and angel investors, who have invested in over 3,000 startups, with easy exit options.
According to industry sources, SEBI decided to make changes in the listing norms as the platform had failed to register even a single startup listing so far. SEBI is hoping that with its this tweaking of regulations, they will be successful in garnering more eyeballs from the startups and entrepreneurs.
Apparently, Sebi’s board is most likely to discuss these changes next month in its board meeting.
SEBI’s plan to make changes in its startup listing platform’s norms were revealed by its chairman, UK Sinha, during his recent visit to US’s Silicon Valley. Sinha had gone to the US to make investors there aware about India’s Startup Industry’s glorious growth trajectory.
“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,” said Sinha in a statement given to a Indian national daily.
Unfortunately, the Institutional Trading Platform (ITP) has failed to attract any startup ever since its adopted an easier set of disclosure and compliance requirements last year in August. The new rules allow startups to get listed on separate ITP of stock exchanges such as the NSE and BSE.
The notified rules stated that the minimum application size and minimum trading lot needs to be kept at Rs 10 lakh in order to make sure that it only attracts sophisticated, genuinely interested, and large investors.
In order to make things a little easier during the listing process, SEBI had also gone to the length of relaxing the mandatory lock-in period for promoters and other pre-listing investors to just 6 months, as against to the three years duration for other companies.
But, unfortunately nothing seemed to have work. “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,” said Sinha.
According to Sinha, SEBI has decided to make the platform bounce back from the lull it has been recently experiencing and is even considering incorporating various suggestions that it has got from a number of Industry experts.
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