‘Start-ups are by design risky companies’

Market regulator SEBI has ruled out any rethink on its decision to keep small investors away from the newly created platform for start-ups.

This is even as some start-ups looking to list themselves on the newly created platform — Institutional Trading Platform (ITP) — see a case for allowing small investors to have a piece of the start-up pie.

The ITP will be a new window on stock exchanges where e-commerce, data analytics, bio-technology, and other start-ups can list.

SEBI has, however, stipulated that only institutional investors and investors other than individual investors will be able to access ITP. The minimum investment size has been prescribed at ₹10 lakh.

"Start-ups by design are risky companies. So we have consciously kept small investors away from this market. When issuers (start-ups) finally go to the main board, everybody can participate," U.K. Sinha, Chairman, SEBI, told reporters on the sidelines of an interactive session on Start-ups and SME IPOs, organised by the PHD Chamber of Commerce and Industry here on Monday.

SEBI has to ensure that there is a balance between the interests of the investors and the need to develop the market, Sinha said, adding that SEBI was reluctant to do it (allow retail investors) right now.

Sinha noted that start-ups may give good returns, but there could also be losses. "This is not only in India, but all over the world."

The name (Institutional Trading Platform) also suggests that this is a market only for institutional investors and not for small retail investors, he added.

Srivats.kr@thehindu.co.in

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