SEBI proposes easier norms for listing of Start-ups

New Delhi, July 30 (KNN) With a view to encourage listing of startups, Security Exchange Board of India (SEBI) has proposed an easier framework that allows more investor categories, relaxed shareholding norms and reduced trading lot amount.

A discussion paper released by the market regulator has suggested easing of restrictive clauses on the shareholding structure of a firm that wants to raise money.

It proposed allowing non-institutional investors to subscribe to a higher portion of the offer and reducing the trading lot size.

The move comes a year after Sebi proposed a start-up listing platform that would allow India’s 3,100-odd early-stage firms to raise money from the primary market. But the concept never took off, owing to these clauses.

SEBI had mooted changes to the framework of Institutional Trading Platform (ITP), which has not seen much traction, though it was put in place in August 2015.

Seeking to widen the eligibility ambit for getting listed on ITP, SEBI has proposed increasing the category of eligible investors when it comes to shareholding before the listing.

Besides QIBs (qualified institutional buyers), family trusts or systematically important NBFCs registered with the RBI, intermediaries registered with SEBI and category III FPIs (foreign portfolio investors) would be considered, subject to certain conditions. (KNN Bureau)