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Kamal Narang

Aiming small: (From right) Mr Sam Pitroda, Chairman, National Knowledge Commission; Mr Tarun Das, Chief Mentor, Cofederation of Indian Industry; and Mr Ashok Ganguly, Chairman, Firstsource and ABP Private Ltd; at a session on ‘Enterpreneurship and recommendations of the national knowledge commission’ in the Capital on Monday. —

Our Bureau

New Delhi, Aug. 11 The National Knowledge Commission, chaired by Mr Sam Pitroda, today suggested establishing a stock exchange for small companies, and creating instruments to enable the firms to raise initial capital.

“Everyone complains of not having enough sources for getting funds, especially small companies. Banks are there, but often small companies are not able to meet their funding needs from these banks. All we want by this secondary market is to provide them with an option,” Mr Pitroda, Chairman National Knowledge Commission, said here at a CII event on entrepreneurship.

A stock exchange would help such companies in raising additional capital, widen the shareholder base and create a market with a public value for shares, the Commission said in a study. Pointing out that various investors including angel investors, venture capitals and PEs were becoming more active, particularly in knowledge-intensive areas, the Commission noted that they required incentives for greater degree of involvement.

The study ‘Entrepreneurship in India’ has mooted the creation of a secondary market for smaller firms, creating new instruments for start-up funding and providing financial literacy to start-ups. The findings pointed that 63 per cent of entrepreneurs interviewed were self-financed, while others were financed by banks, venture capitals, angel investors amongst others.

The Knowledge Commission would help in establishing a portal focusing on young-generation entrepreneurs for providing information about venture capital and bank funding, he added. According to the study, there is a strong perception among entrepreneurs that start-up funding is very difficult, in the country.

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