Start-up companies and SMEs may soon be able to get listed on the stock exchanges without launching an Initial Public Offer (IPO), but trading in their shares would be restricted to only “informed” investors.
However, companies desirous of getting listed without IPO would need to have prior investments by entities like venture capital funds, merchant banks, domestic or global multi-lateral lending agencies and other institutional investors.
Besides, the SMEs and start-up companies looking to get listed through this route would require a clean track record in terms of their borrowings, corporate governance and disclosure norms, sources said.
The proposal would be considered by the capital markets regulator Sebi in its next board meeting on Tuesday, they added.
As per the framework under consideration, Sebi may allow listing of only those companies operating for 10 years or less, having revenues of more than Rs 100 crore or paid up capital over Rs 25 crore.
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