SEBI to soon issue norms for listing start-ups, SMEs sans IPO

Start-ups and small and medium enterprises will be able to get themselves listed on the stock exchanges without having to make an initial public offer (IPO) once the market regulator Securities and Exchange Board of India (SEBI) notifies necessary guidelines.

SEBI had already amended rules to permit the listing of start-ups and SMEs in institutional trading platform without an IPO.

According to sources, the Securities and Exchange Board of India is expected to notify the new regulations within a week.

In June the SEBI board had approved the amendments of rules to permit listing of start-ups and SMEs in institutional trading platform (ITP) without an IPO.

The move is aimed at providing easier exit options for entities such as angel investors, venture capital funds and private equities. It will also provide a wider investor base, better visibility and greater fund-raising capabilities to such companies.

Start-ups and SMEs have been hamstrung for want of exit opportunities for investors and restricted access to new ones.

For trading on ITP platform, SEBI had, in June, fixed the minimum amount for trading or investment on ITP at Rs10 lakh.

Such companies would also be exempted from the requirements of having to offer up to 25 per cent of shareholding to public through an offer document in order to get listed.