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The Securities and Exchange Board of India on Friday notified new listing rules aimed at helping start-ups access the mainstream capital market.
The new, ‘institutional trading platform (ITP)’ is for companies that are technology intensive. At least 25 per cent of the pre-issue capital of such companies has to be held by qualified institutional buyers.
Any other entity in which at least 50 per cent of the pre-issue capital is held by qualified institutional buyers as on the date of filing of draft information documents is also eligible.
Disclosure norms eased The biggest gripe for start-ups wishing to list publicly was the strict disclosure norms. The ITP relaxes these requirements. For instance, promoter holdings are locked in for three years while listing on the main platform.
Under the new platform, this is reduced to six months. A company listing on the ITP need not go into details on how it will use the funds raised (the objects clause in the offer document has been liberalised), nor does it have to disclose information on group companies, litigation and creditors unless it believes the information is material.
SEBI has kept the minimum trading lot and the minimum application size at ₹10 lakh. This could dampen the spirits of small investors.
An entity that has listed its shares on the ITP has the option of migrating to the main board of a recognised stock exchange three years from the date of listing.
Institutional investors along with family trusts, systematically important NBFCs and intermediaries that are registered with SEBI and have a minimum net worth of ₹500 crore will be allowed to access the platform.
Non-institutional investors, except retail investors, can participate in the investing.
Exiting the platform SEBI has notified that companies can exit the platform if their shareholders have approved the move by passing a special resolution via postal ballot, where 90 per cent of the total votes and the majority of non-promoter votes are in favour of such a move.
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