technology companies play a major role in nation building and have a great
potential in generating income as well as innovation. These companies for want of
a better price discovery and the relaxed regulatory regime often plan to get
listed in Singapore or the US. For removing this problem and for creating a
more appealing environment for Indian entrepreneurs to list their securities in
India, SEBI has through its press release proposed simplified
framework for capital raising by technological start-ups and other companies. The
highlights of the proposals are as follows:
Listing to be done on the Institutional
Trading Platform (ITP).
Following types of companies covered:
companies which are intensive in their
use of technology, IP, data analytics with substantial value addition and who
have at least 25% of the pre-issue capital being held by QIBs,
any other company in which at least
50% of the pre-issue capital is held by QIBs.
No person (individually or
collectively with persons acting in concert) in such a company shall hold 25%
or more of the post-issue share capital.
Considering the nature of business of
companies which may list on ITP, disclosure may contain only broad objects of
the issue and there shall be no cap on amount raised for General Corporate
Further, the lock in of the entire
pre-issue capital shall be for a period of 6 months from the date of allotment
uniformly for all shareholders.
As the standard valuation parameters
such as P/E, EPS, etc. may not be relevant in case of many of the subject
companies, the basis of issue price may include other disclosures, except
projections, as deemed fit by the issuers.
Companies intending to list on the
ITP, shall be required to file draft offer document with SEBI for observations,
as provided in SEBI (ICDR) Regulations, 2009.
Only following categories of investors
shall be permitted
systematically important NBFCs
registered with RBI; and
intermediaries registered with SEBI,
all with net-worth of more than Rs. 500 crore and
Non-Institutional Investors (NIIs)
other than retail
Allocation between QIB and NII shall
be in the ratio of 75% (discretionary) and 25% (proportionate), respectively.
QIB’s allotment shall be limited to
10% of the issue size and shall be subject to a lock in of 30 days at present.
Minimum application – Rs. 10 lakhs
Minimum trading lot – Rs. 10 lakhs.
number of allottees 200
For Category I and II AIFs,
which are required under the SEBI (Alternative Investment Funds) Regulations,
2012 to invest a certain minimum amount in unlisted securities, investment in
shares of companies listed on this platform may be treated as investment in
‘unlisted securities’ for the purpose of calculation of the investment limits.