New Delhi, Apr 2 (KNN) The Indian electronics industry is taking steps to establish a specialised stock exchange modelled after China's Shanghai Stock Exchange STAR Market.

The goal is to provide high-tech and emerging technology companies greater access to capital markets for funding and growth, reported ET.

The India Cellular & Electronics Association (ICEA) is spearheading discussions with fund houses over the past two weeks to create this new exchange.

According to ICEA founder Pankaj Mohindroo, the aim is to facilitate investment in promising tech firms, especially those involved in semiconductor design and other cutting-edge technologies with strong valuation potential.

"These are industries which are just emerging, and we've started discussions with fund houses to set up an exchange like the SSE STAR where high-tech companies can raise capital from investors to fuel their growth given the large market opportunities," Mohindroo stated.

However, the initiative requires capacity building across industry associations and government departments. Securing regulatory approval from the Securities and Exchange Board of India (SEBI) will also be crucial, as per industry experts.

SEBI's approach to listing norms and regulations for such an exchange will largely determine its success as India's equivalent of the Nasdaq, noted Anand Lunia, founding partner at VC firm India Quotient.

Industry experts suggest modelling the proposed exchange after SEBI's SME exchange platform with relaxed listing requirements could be advantageous. This would allow high-tech firms to raise public funds more readily. However, SEBI's recent trend of tightening norms post the listings of several internet unicorns is a potential challenge.

"The investor community and media need to use a different probabilistic lens for evaluating high-tech companies, which are known to take time in achieving profitability and may not move in a straight line," noted Anand Lunia of India Quotient.

The move aligns with the government's ambition of achieving USD 1 trillion in electronics production over the next five years. It mirrors China's efforts through the STAR Market to channel financing towards strategic emerging industries under initiatives like Made in China 2025.

(KNN Bureau)