Mumbai: The Securities and Exchange Board of India (Sebi) on Thursday eased eligibility and listing criteria on the so-called Innovators Growth Platform (IGP), a separate exchange venue for new-age startups.
At present, for a company to be able to list on IGP its 25 per cent pre-issue capital needs to be held for at least two years by an institutional investor and other large investors. Sebi has eased this requirement to just one year.
Also, up to 25 per cent of pre-issue shareholding of ‘accredited investors’ –an individual investor with net worth of Rs 5 crore—will allowed for the above eligibility criteria. Earlier, a maximum of 10 per cent of pre-issue holding of accredited investors’ was considered for the 25 per cent pre-issue eligibility requirement.
Sebi also allowed companies with superior voting rights to list on IGP. Further, the open offer trigger for companies listed on this platform has been eased from 26 per cent to 49 per cent. Sebi has also made it easy for company to delist or to migrate to the main board—which is the NSE or BSE.
Introduced in 2019, IGP is aimed providing technology-oriented startups or companies with early-stage investors a listing opportunity with a much more relaxed framework compared to the mainboard. The platform is yet to see any listing.
“Several sweeping changes have been proposed for the IGP platform. This should pave the way for easier fund raise by start-ups,” said Rajesh Thakkar, Partner & Leader – Transaction Tax, BDO India.
Meanwhile, the Sebi board has also tweaked the delisting regulations. Going ahead, promoters will have to disclose their intentions to delist. Also, independent directors will have to guide the minority shareholders of a delisting-bound company by providing a reasoned recommendation on the delisting proposal. Further, Sebi has made various timelines associated with delisting more efficient.
Sebi has also provided some relaxation with regard to reclassification of promoter shareholding. Promoters with less than 1 per cent shareholding and no ‘control’ will not be required to see shareholders’ nod for reclassification to ordinary shareholders. Also, the Time gap between the date of board meeting and shareholders meeting has been reduced to make the process more efficient.