As per U.K.Sinha (SEBI Chairman), in India, technological start-ups have crossed 3,000 and the way the new start-ups are coming up at the rate of almost 800-1,000 per year, it is expected that the number of technological start-ups would cross 10,000 start-ups by 2020. A large number of start-ups will be looking to raise funds. In order to encourage the Indian start-ups and entrepreneurs to remain within the country rather than moving abroad for funds, SEBI has introduced changes in the existing norms for listing on Institutional Trading Platform (”ITP”). The existing Chapter XC of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 – “Listing and Issue of Capital by Small and Medium Enterprises on Institutional Trading Platform without Initial Public Offering” which was introduced in October, 2013, has been replaced by new Chapter XC named “Listing on Institutional Trading Platform”.
The existing regulations already allowed SMEs to list themselves on ITP without a public issue. Amongst many other advantages, these new norms have done away with various eligibility criterion which laid restrictions on the turnover, paid-up capital, years the company has been in existence, etc. The new regulations provide the option for listing on ITP with or without a public offer. This article shall provide you with a summary of these newly introduced regulations.