New Delhi, June 13: Market regulator Securities and Exchange Board of India (SEBI) has set up a panel to recommend the ways to make stock market listing attractive for startups.
The panel has to submit the report within a period of one month. SEBI also said the group has been formed after discussions with various stakeholders.
Members of the group include representatives from 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.
This move will open a new way for finance if entrepreneurs find it difficult to obtain capital from traditional sources of finance such as banks and financial institutions.
In 2015, the ITP framework was put in place in with a view to facilitating the listing of new age companies in sectors like e-commerce, data analytics, biotechnology and other startups.
As this "framework failed to gain any traction", SEBI said the group has been formed after discussions with various stakeholders.
Along with this SEBI has constituted a committee to examine the direct listing of Indian companies on overseas bourses. Companies incorporated in India can today list their debt securities on international exchanges (Masala Bonds) but their equity share capital can be listed abroad only through the ADR / GDR route. Similarly, companies incorporated outside India can access the Indian capital markets only through the IDR route. Thus, presently, direct listing of equity share capital of companies incorporated in India is not permitted on foreign exchanges and vice versa. Considering the evolution and
Internationalization of the Capital Markets, it would be worthwhile to consider facilitating companies incorporated in India to directly list their equity share capital abroad and vice versa. In this regard, it has been decided to constitute an Expert Committee to look into this aspect in detail.