To make start-up listing platform more attractive, regulator Sebi plans to relax norms by next month to help them tap this avenue for raising funds as also to give an easier exit opportunity to their
To make start-up listing platform more attractive, regulator Sebi plans to relax norms by next month to help them tap this avenue for raising funds as also to give an easier exit opportunity to their existing investors including from abroad.
The platform is aimed at providing easier exit opt-ions for angel investors, domestic and foreign venture capital funds and private equity players, who have invested in over 3,000 startups, including in new technology space, in India.
As the platform has failed to attract a single startup for listing so far, Sebi has decided to tweak the regulations to make them more attractive after incorporating some fresh suggestions from the industry and market players. Sebi’s board is likely to discuss the fresh changes in its board meeting next month.
Sebi chairman U.K. Sinha, who is visiting the United States, including Silicon Valley, to hard-sell India’s growth story among the investors, said: “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,” Mr Sinha said.
The Institutional Trading Platform (ITP) is yet to see any start-up listing ever since an easier set of compliance and disclosure requirements was notified in August 2015.
Under the rules, start-ups can list on the separate ITP of stock exchang-es such as BSE and NSE.
“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,” he said.
He also invited US investors to invest in Indian companies as the country fares better in protecting minority shareholders than the US.
“A lot of investment has taken place in those companies from Silicon Valley. The question is how they exit, and what is the minority shareholder protection available to them ”
Minority shareholders in India now have stronger rights than in the US, he said.