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SGBS Unnati Foundation became the first entity to list on the social stock exchanges (SSE) on Wednesday.
SUF is a not-for-profit organisation (NPO) incorporated in 2011 that has trained over 45,000 youth. The entity had raised ₹1.8 crore from Zerodha, Nabard, Govind Iyer, and Ashish Kacholia during its fundraising period between October 30 and November 22.
On listing, the Zero Coupon Zero Principal (ZCZP) instruments with a face value of ₹1 each will get credited into the demat accounts of the respective donors. This will not be traded but will sit in their accounts. The value of the instrument for the donor will become zero at the end of one year when SUF’s project is completed.
“The fundraise will help us train 10,000 youth across States and help them get jobs. The listing will add to the credibility and comfort factor for investors, as they will be able to better monitor how the funds are utilised,” said Ramesh Swamy, lead trustee at SUF.
An exchange listing allows for the requisite checks and balances, such as disclosing the purpose for raising funds and providing a timeline for their utilisation. The requirement to submit annual impact reports audited by social audit firms will add to the element of transparency, said experts.
There are 38 more NPOs registered with the NSE SSE, and more listings could be in the offing in the next few months.
Ashish Chauhan, managing director and CEO at NSE, said that SSEs represent a unique approach to impact investing, creating a bridge between donors and the NPOs dedicated to driving social change. “This framework offers a host of advantages, such as transparency, trust, efficiency, and cost savings. SSEs create a space where philanthropists, impact investors, and NPOs can converge and each contribute to a shared vision of a more sustainable and equitable future,” he said.
Also read: FPIs put in over ₹8,500 crore in IPOs in CY23
The SEBI board recently approved halving the minimum issue size of ZCZPs by NPOs on SSEs to Rs 50 lakh from Rs 1 crore. The minimum application size will be reduced to ₹10,000 from ₹2 lakh to enable wider participation. More NPOs will be made eligible for registration and fund-raising through the issuance and listing of ZCZPs on SSEs.
SSEs were first mooted in the FY20 Budget with the aim of listing social enterprises and voluntary organisations.
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