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SEBI’s proposal of attractive listing norms for start-ups

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The SEBI proposed to ease listing norms for start-ups in India. The new set of recommended changes will allow more investor categories, relax share holding norms and reduce trading lot amount. SEBI issued consultation paper to review its Institutional Trading Platform (ITP) framework and rename it to Innovators Growth Platform (IGP).

At present promoter or any entity not eligible to hold more than 25% in start up after ipo. The minimum application size for startup ipo has been proposed to 2 lakh which is currently 10 lakh. The minimum lot size also proposed to 2 lakh from 10 lakh. Currently in a start-up IPO, 75% of the net offer has to be allocated to institutional investors and the remaining 25% can be allocated to other investors. The minimum number of share allottees in a start-up IPO too has been proposed to be reduced from 200 to 50.

SEBI comes up with recommendations given below:

  • To remove the cap of holding for investors in start-ups post listing
  • Reduce the minimum investor application size
  • Remove reservations norms for various classes of investors
  • Relax the minimum required number of allottees in start-up listing
  • Relax the share lock-in norms post-listing
  • Relax the minimum trading lot-size required for startups post listing
  • Broaden the definition of start-ups and eligible investors to allow all classes of investors to support start-up growth
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