The Securities and Exchange Board of India (SEBI) has proposed to tweak listing norms for start-ups, in an attempt to make it more attractive for companies in sectors like e-commerce, data analytics and bio-technology. SEBI has mooted changes to the framework of Institutional Trading Platform (ITP), which has not seen much traction from 2015.
Some of the noteworthy proposals are listed below:
- It has been proposed to reduce the minimum trading lot size to Rs 2 lakh from the existing Rs 10 lakh and lock-in of 6 months for all categories of pre-IPO public shareholders, unlike the current rule which exempts private equity funds from lock-in.
- The minimum number of allottees has also been proposed to be reduced to 50 from the existing 200.
- It has proposed to remove minimum reservation of allocation to any specific category of investors. At present, rules allow 75 percent of the net offer to public to be allocated to institutional investors and the remaining 25 percent to non-institutional investors.
The discussion paper on review of framework for ITP has been prepared after taking into consideration recommendations of SEBI constituted group, Primary market advisory committee and market participants’ feedback.