MUMBAI, June 23 (PTI): 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, the 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 Securities and Exchange Board of India (Sebi) in its next board meeting on Tuesday, they added.
The proposed listing is expected to help SMEs and start-ups access capital easily and mitigate the risks associated with these securities for the investors.
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 1.0 billion or paid up capital over Rs 250 million.
Meanwhile, the regulator is planning to relax the minimum 25 per cent public shareholding requirement for the SME's and start-ups on the proposed platform, keeping in view that most promoters would not like to dilute their stake at an early stage of their company's life cycle.
However, the requirement to launch an IPO and other listing norms would apply on a firm desirous of shifting to the main trading platform or the existing SME exchange.
However, the 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 Securities and Exchange Board of India (Sebi) in its next board meeting on Tuesday, they added.
The proposed listing is expected to help SMEs and start-ups access capital easily and mitigate the risks associated with these securities for the investors.
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 1.0 billion or paid up capital over Rs 250 million.
Meanwhile, the regulator is planning to relax the minimum 25 per cent public shareholding requirement for the SME's and start-ups on the proposed platform, keeping in view that most promoters would not like to dilute their stake at an early stage of their company's life cycle.
However, the requirement to launch an IPO and other listing norms would apply on a firm desirous of shifting to the main trading platform or the existing SME exchange.
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