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Start-ups have given their thumbs up for market regulator SEBI’s radical move to relax listing norms and create a dedicated platform for start-ups to list on stock exchanges in India.
“This is a bold move, which has happened at good speed with a lot of thought which helps both start-ups and potential investors,” said Sharad Sharma, co-founder and governing council member of iSPIRT.
As per the new norms approved by SEBI, the stock exchanges would have a separate institutional trading platform for listing of start-ups from the new age sectors, including e-commerce firms, while the minimum investment requirement would be ₹10 lakh.
Further, the mandatory lock-in period for the promoters and other pre-listing investors to six months, instead of three years as was the norm earlier.
“It is a welcome move and would help us raise capital through the public route,” said Rajiv Kumar, Founder, Manusis Technologies.
Addressing allIt also addresses a huge issue of start-ups moving out of the country to set up their headquarters or list their business in international bourses as they found SEBI norms to be stifling. With the new norms, SEBI is addressing all of this.
“Relaxed listing norms, lower lock-in period and protection for retail investors are good initiatives,” said Sharma.
The new norms also mandates 75 per cent shares can be reserved for institutional investors, while allocation can be on discretionary basis for such investors and 25 per cent of tech start-ups' capital pre-issue would need to be with institutional investors. For non-tech start-ups, the same would be 50 per cent.
Snapdeal spokesperson said, “SEBI’s proposed plans to implement e-IPO and start-up specific listings platform is a welcome move that will provide much-needed access to funds for start-ups. For us at Snapdeal, we are particularly pleased with this move considering that easing of listings norms will benefit India-focused companies like ours in the long run.”
Navneet Singh, founder, PepperTap, said, “The regulations are definitely a step in the right direction. Once the details are clear, I think it should specifically become easier for early stage start-ups to raise seed capital as investors will be more confident of excited if the companies become successful.”
Some industry watchers believe this is only the start. “We have to make company incorporation easier, remove angel tax and improve ease of doing business,” said V Balakrishnan, chairperson of Exfinity fund
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