SEBI Sets Up Panel To Look At Ways To Attract Startups To Emerge ITP

To boost the booming Indian startup ecosystem, the Securities and Exchange Board of India (SEBI) has set up a panel to explore ways to make listing attractive for startups.

According to a Livemint report, the SEBI panel will review the present Emerge Institutional Trading Platform (ITP) framework in the current context as well as identify areas, if any, which require further changes.

In the release, SEBI said that any other issue relevant to the framework might also be assessed.

“The group shall endeavour to submit the report to SEBI within a period of one month,” it added.

Inc42 had earlier reported that the National Stock Exchange (NSE) is in talks with SEBI to ease startup listing norms on its platform Emerge ITP.

Launched in December 2013, Emerge ITP is a regulated marketplace which allows startups to list with or without an initial public offering (IPO).

The platform connects growing businesses to a pool of sophisticated investors while offering a wide variety of exciting investment opportunities to investors.

Emerge ITP has been struggling to generate interest for quite some time, as so far, only 11 startups have listed on the platform. One of the major limitations that startups face is that only those that have raised external funding of not more than $4 Mn are eligible to get listed on Emerge ITP.

Identifying that this “framework failed to gain any traction,” SEBI said that the group has been formed after discussions with various stakeholders.

Representatives of the Indian Software Product Industry Round Table (iSPIRT), The Indus Entrepreneurs (TIE), the Indian Private Equity and Venture Capital Association (IVCA), law firms, merchant bankers, and stock exchanges constitute the group.

SEBI has been addressing the concerns of startups to bolster the Indian startup ecosystem.

In March, SEBI approved doubling the maximum investment limit by angel funds in venture capital undertakings to $1.5 Mn (INR 10 Cr) from the current $770.5 K (INR 5 Cr).

At present, 398 alternative investment funds (AIFs) are registered with SEBI, of which 114 are registered under Category I, including eight angel funds.

Angel funds are aimed at encouraging entrepreneurship by financing small startups at an early stage, which find it difficult to obtain capital from banks and financial institutions.

Looks like SEBI could take some lessons from NSE Emerge — the NSE’s SME listing platform has roped in 44 companies, of which 31 got listed in 2016-17 alone, raising $55.8 Mn (INR 363.23 Cr), according to the NSE’s latest annual report.