Internet startups can now finally look forward to listing on the Indian bourses itself rather than listing abroad. In its board meeting held on Tuesday, market regulator Securities and Exchange Board of India (Sebi), announced a simplified framework for capital raising by technological startups and other companies on the Institutional Trading Platform (ITP).
The board undertook a review of the extant regulatory framework in the primary market and noted the suggestions of market participants on making the existing avenues for capital raising amenable for accommodating a larger number of startup companies, Sebi said.
According to the new framework, there shall be no cap on amount raised for general corporate purposes and the lock-in of the entire pre-issue capital shall be for a period of six months from the date of allotment uniformly for all shareholders. In case of public offer, allotment to institutional investors may be on a discretionary basis whereas to non-institutional investors (NIIs), it shall be on a proportionate basis and allocation between the said two categories shall be in the ratio of 75 per cent and 25 per cent, respectively.
Sebi has also specified on the minimum application size and the number of allottees in case of the public offering by these companies. “The minimum application size in case of such issues shall be Rs 10 lakh and the minimum trading lot shall be of Rs 10 lakh,” Sebi said.
Only two categories of investors can access the proposed ITP, Sebi said. They are: (i) Institutional Investors (QIB), along with family trusts, systematically important NBFCs registered with RBI and the intermediaries registered with Sebi, all with net-worth of more than Rs 500 crore, and (ii) NIIs other than retail individual investors.
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