List by December Sebi to start-ups
Asks exchanges to speed up efforts in attracting new- age companies
The Securities and Exchange Board of India ( Sebi) is keen on having companies list under the new start- up regulations before the end of the calendar year. The market regulator has asked stock exchanges to speed up their efforts in attracting new- age companies to the stock markets for their funding requirements.
Exchanges have also been tasked to spread awareness and get market feedback on the new regulations. Given the regulatory push, the exchanges have already started their drive.
BSE has already launched an institutional trading platform (ITP) — BSE Hi- Tech for start- up listings. The exchange, which had achieved considerable success in SME listings, has set up an office in Bengaluru, where most of the technology start- ups are based.
“We have announced a hitech platform for start- ups.
Tomorrow ( on Wednesday), we are opening our branch office in Bengaluru. We already have offices in Chennai, Hyderabad and Delhi, where most start- ups are based. We are trying to get these companies on board,” said Ashishkumar Chauhan, managing director &CEO, BSE.
India’s oldest stock exchange is also in talks with e- commerce companies to list.
Meanwhile, the National Stock Exchange ( NSE) has said it was awaiting regulatory clarity before they firmed up their plans.
“Compensating employees without affecting cash flows through Employee Stock Ownership Plans (ESOPs) becomes a powerful tool to attract and retain talent,” states BSE’s presentation to start- ups.
The market regulator cleared the regulations for listing of technology, data analytics, e- commerce companies on the ITP in August.
The companies will have an option to list without an initial public offering with a minimum disclosure requirement.
However, to protect investors, Sebi has kept the entry threshold high at application size of Rs.10 lakh.
Although the regulations have been welcomed by most market participants, Sebi has also received feedback to tweak the framework. Sebi Chairman U K Sinha at a recent event said the market regulator would be open to making changes to the regulations.
A start- up offering needs at least 200 investors, which the market players believe, needs to be reduced to ensure successful IPOs.
Also, Sebi has set the maximum threshold of 25 per cent promoter holding for companies wanting to tap the new start- up platform. Industry players want promoter holding threshold should be raised.
Sebi is said to be considering the market feedback on these two critical issues. The market regulator, however, isn’t willing to reduce the minimum investment and lot size to enable retail entry.
" Start- ups by design are risky companies. There may be good returns but there can also be loss. This is not true just for India but all over world," said Sinha this week, explaining the rationale for higher entry barrier.
WELCOME TO THE BOURSES
- BSE has already launched an institutional trading platform ( ITP), BSE Hi- Tech, for start- up listings
- The market regulator cleared the regulations for listing of technology, data analytics and e- commerce companies on the ITP in August
- The companies will have an option to list without an initial public offering, with aminimum disclosure requirement
- To protect investors, Sebi has kept the entry threshold high at application size of Rs.10 lakh
- A start- up offering needs at least 200 investors, which the market players believe needs to be reduced to ensure successful IPOs
Business Standard, New Delhi, 14th Oct. 2015
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