Sebi to consider changes in start-up listing norms: Sinha

He emphasised the regulator is trying its best to create a conducive climate for start-ups and ensure that they raise money domestically through markets rather than from overseas markets such as Singapore and the US.

To attract new age companies into the capital market, Sebi, in August, notified relaxed listing norms for such entities. Participating at an event on start-ups here, Sinha said the regulator is willing to consider suggestions for possible changes in the listing norms. “We are willing to incorporate them (suggestions), we are willing to understand them,” Sinha said. Various market participants have suggested several changes to the norms with regard to <g data-gr-id="51">listing</g> of start-ups.

Among others, one suggestion was for doing away with the requirement of at least 25 per cent of the pre-issue capital to be with institutional investors for technology start-ups, while it is 50 per cent of companies from other areas.

Speaking at the event organised by industry body <g data-gr-id="63">PHD</g> Chamber, Sinha said that tax issues related to <g data-gr-id="62">listing</g> of start-ups would be taken up with the government. Earlier, industry bodies had sought a more tax-friendly environment for start-ups. “I like to assure you that we will take up the tax issue with the government,” the Sebi chief said. 

According to Sinha, start-ups by design are risky companies. Regarding small investor aspect in start-ups, he said Sebi has to ensure that there is a balance between the interest of investors and the need to develop markets. “A start-up by design are risky companies. There may be good <g data-gr-id="59">returns</g> but there can also be <g data-gr-id="58">loss</g>. This is not true just for India but all over <g data-gr-id="61">world</g>. So, we have by design provided to take away the small investors away from this market and when they go to the main board everybody can participate and that is why we have kept a limit of Rs 10 lakh so far as investors are concerned into this market,” he added. 

The Securities and Exchange Board of India (Sebi), has notified regulations for start-ups to list and raise funds through a dedicated platform on domestic stock exchanges, rather than going overseas.

Under the new norms, <g data-gr-id="39">bourses</g> would have a separate institutional trading platform for <g data-gr-id="40">listing</g> of start-ups from the new age sectors, including e-commerce <g data-gr-id="41">firms,</g> while the minimum investment requirement would be Rs 10 lakh.

For their listing, Sebi has relaxed the mandatory lock-in period for the promoters and other pre-listing investors to six months, as against three years for other companies. Sinha said start-ups going overseas to raise funds is not a thing unique to India. “We don’t need to panic. 

These are not <g data-gr-id="53">a unique phenomena</g> to India. Exchanges across the world are facing the same situation,” he added. However, he noted that the regulator is trying its best to create <g data-gr-id="52">conducive</g> climate for start-ups to fuel India’s growth story by way of restricting their migration to countries such as Singapore and the USA.