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SEBI has proposed to further relax the norms for listing start-ups by allowing more investor categories, relaxing shareholding norms and reducing the trading lot amount.
This is the second time the market regulator has initiated tweaking of norms as there has been no interest from start-ups to get listed on the Institutional Trading Platform (ITP).
SEBI on Friday mooted changes to the framework of ITP, which has failed to draw traction. Under the plan, ITP will be renamed Innovators Growth Platform (IGP).
Twenty-five per cent of the pre-issue capital shall be held by qualified institutional buyers (QIBs) or other regulated entities or accredited investors for at least two years.
Out of this, not more than 10 per cent shall be held by accredited investors.
QIBs, family trusts with networth of more than ₹500 crore, category III foreign portfolio investors (FPIs) shall be made eligible.
SEBI also proposed that entities with pooled investment funds and minimum assets under management of $150 million and those from a jurisdiction signatory to the International Organisation of Securities Commission’s Multilateral MoU shall qualify to hold 25 per cent of the pre-issue capital.
SEBI defined accredited investor as an individual with total gross income of ₹50 lakh annually and one who has a minimum liquid net worth of ₹5 crore or any body corporate with net worth of ₹25 crore.
The regulator also suggested tweaking the share allocation limit in entities listed on the platform. It ruled out any minimum reservation of allocation to any specific category of investors, and said the allocation should be on a proportionate basis.
Currently 75 per cent of the net offer to the public should be allocated to institutional investors and the remaining 25 per cent to non-institutional investors.
Minimum trading lot
According to the discussion paper, the minimum trading lot should be reduced to ₹2 lakh from the existing ₹10 lakh. Besides, the minimum number of allottees will be decreased to 50 from the current 200.
The discussion paper is open to public comments till November 16.
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