New Delhi, March 31 (KNN) The Securities and Exchange Board of India is expected to relax listing norms for new age technology start-ups to list in the country.
 
This includes easing norms on profitability track record, definition of promoter, objective of the issue and lock-in period for promoters.
 
For example, under the existing regulations, the promoters are required to offer a minimum 20 per cent of post-issue capital as lock-in for a period of three years.
 
However, many start-ups have lower holding by founding-members (often less than 20 per cent) and a large holding of institutional investors. SEBI has now proposed that the lock-in of the entire post-issue capital should be for a period of six months uniformly for all shareholders.
 
Similarly, existing regulations require the company to disclose the basis for issue price, including disclosure of earnings per share and pre-issue average return on net worth. Now the disclosures may be as deemed fit by the issuers accessing the market.
 
It is proposed that the new platform for raising money within the country will be initially made applicable to companies which are in the area of software product development, e-commerce, new-age companies having innovative business model, etc., which create new business opportunities or which serve important efficiency enhancement in existing business activities, as per the discussion paper released by SEBI on Monday.
 
If the capital-raising process in India is not further relaxed for such issuers, they may be driven to list on stock exchanges outside India. It has been a challenge for SEBI to simplify the capital-raising process for such issuers while protecting the interest of retail investors,” SEBI noted in the paper. (KNN/DB)