Listing norms for start-ups relaxed

Mumbai: Making it easier for start-ups to raise funds, regulator Sebi on Friday notified a new set of listing norms for such entities, including e-commerce ventures, on a separate platform of domestic stock exchanges. The new norms provide significant relaxations in the disclosure requirements, while Sebi has also relaxed its delisting, takeover and Alternative Investment Fund regulations for such new-age entities engaged in IT, data analytics, intellectual property, bio-technology or nano-technology like activities.

The extensive changes in Sebi regulations would allow such entities to get listed on the separate Institutional Trading Platform of the exchanges such as BSE and NSE and are aimed to encourage the Indian start-ups and entrepreneurs to remain within the country rather than moving abroad.

However, the new platform would be open to only institutional investors and HNIs, as Sebi feels that small retail investors need to be safeguarded against a higher level of risks associated with this platform. Sebi has kept the minimum trading lot and the minimum application size at Rs 10 lakh so that only sophisticated and large investors come in.

The companies can, however, graduate to the main platform later and the small investors can also invest at that time. Sebi chairman U.K. Sinha had recently said that such firms might lack a profitability track-record, but many of them have huge potential to become highly profitable.