Recently SEBI is open the doors for raising the funds from Public through IPO for the startups and small companies.
Following are Norms which is introduce by SEBI IN 2015
1. Securities and Exchange Board of India (SEBI) has in its SEBI Meeting decided to relax norms for Start‐ups to raise Capital
and simplify the framework for Capital Raising by technological start‐ups and other companies on Institutional Trading Platform (ITP).
2. ITP shall help in capital raising apart from facilitating the trades.
3. ITP will be made accessible to
a. companies which
i. provide products, services or business platforms with substantial value addition and
ii. have at least 25% of the pre‐issue capital being held by QIBs (Qualified Institutional Buyers) and
iii. are intensive in their use of
2. information technology,
3. intellectual property,
4. data analytics,
b. any other company in which at least 50% of the pre‐issue capital is held by QIBs.
4. SEBI has disallowed a person to individually or collectively with persons acting in concert to hold 25% or more of the post‐issue share capital.
5. Lock in of the entire pre‐issue capital shall be for a period of 6 months from the date of allotment.
6. Companies intending to list on the proposed ITP, shall be required to file draft offer document with SEBI for observations and SEBI (ICDR) Regulations, 2009 need to be complied with.
7. Disclosure of such companies may contain only broad objects of the issue and there shall be no cap on amount raised for General Corporate Purposes.
8. As the standard valuation parameters such as P/E, EPS, etc. may not be relevant in case of many of such companies, the basis of issue price may include other disclosures as deemed fit by the issuers but cannot be based on projections.
9. Only two categories of investors can access the proposed ITP i.e.
a. Institutional Investors (QIB as defined in SEBI (ICDR) Regulations, 2009 along with family trusts, systematically important NBFCs registered with RBI and the intermediaries registered with SEBI, all with net‐worth of more than Rs. 500 crore) and
b. Non‐Institutional Investors (NIIs) other than retail individual investors.
10. In case of public offer, allotment to institutional investors may be on a discretionary basis whereas to NIIs it shall be on proportionate basis. Allocation between the said two categories shall be in the ratio of 75% and 25%, respectively.
11. In case of discretionary allotment to institutional investors, no institutional investor shall be allotted more than 10% of the issue size.
12. All shares allotted on discretionary basis shall be locked‐in in line with requirements for lock‐in by Anchor Investors i.e. 30days at present.
13. The minimum application size in case of such issues shall be Rs. 10 lakhs and the minimum trading lot shall be of Rs. 10 lakhs.
14. The number of allottees in case of a public offer shall be 200 or more.
15. The company will have the option to migrate to main SEBI after 3 years subject to compliance with eligibility requirements of the stock exchanges.
16. For Category I and II AIFs, which are required under the SEBI (Alternative Investment Funds) Regulations, 2012 to invest acertain 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.
17. Grandfathering of existing companies listed on SME‐ITP The existing companies listed on SME‐ITP may continue to be guided by the existing regulatory framework for them.
18. Rationalisation of disclosures for proposed ITP as well as main SEBI Further, in order to rationalize the disclosures requirements for all issuers whether intending to list on the main SEBI or the proposed ITP, it has been decided that the disclosures in offer document with respect to group companies, litigations and creditors shall be in accordance with policy on materiality as defined by the issuer. However, all relevant disclosures shall be available on the website of the issuer. Also, the product advertisements of an issuer will not be required to give details of public/rights issue.
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