To enhance listing of begin-ups, markets regulator Sebi on Thursday mentioned it has recommended relaxations in norms, which includes lowering holding period for pre-problem capital and permitting discretionary allotment to all eligible investors.
The alterations have been proposed to the framework for listing on Innovators Growth Platform (IGP), Sebi mentioned in a statement.
Other proposals consist of delivering differential voting rights (DVR) to promoters, retaining superior voting rights (SR) for current institutional investors holding more than 10 per cent of capital, and easing delisting specifications as effectively as takeover norms.
The regulator has issued a consultation paper in this regard and sought ideas from public till January 11.
Sebi has recommended lowering the period of holding of 25 per cent of pre-problem capital of the issuer firm by eligible investors to one particular year from present requirement of two years.
On the lines of provisions for listing of firms on the most important board, Sebi has proposed that “up to 60 per cent portion of the issue size may be allocated on a discretionary basis, prior to issue opening, to all eligible investors…provided that there will be a lock in of 30 days on such shares.” Issuer firms looking for listing below IGP really should be permitted to problem DVR and SR equity shares to promoters and founders, Sebi recommended.
The regulator has also proposed that there really should be continuation of unique rights, such as board seat and veto or affirmative voting rights, for current institutional investors holding in excess of 10 per cent of capital.
Another proposal is to exempt Alternative Investment Fund (AIF) Category II investors from post problem lock-in requirement of six months, topic to particular circumstances.
Further, Sebi has recommended that accredited investors’ pre-problem shareholding really should be viewed as for whole 25 per cent of the pre-problem capital of the issuer firm as an alternative of present 10 per cent.
Also, it has been encouraged that loved ones trusts really should be incorporated in accredited investors definition. Currently, the definition covers only men and women and body corporate.
Sebi recommended that stipulation for triggering open give below the takeover norms really should be relaxed to a larger threshold of 49 per cent from current 25 per cent. This is topic to the situation that any transform in manage irrespective of worth of acquisition will trigger open give.
“The threshold for disclosure of the aggregate shareholding is proposed to be increased from the present 5 per cent to 10 per cent and whenever there is subsequent change of 5 per cent (instead of present 2 per cent) in the shareholding,” Sebi mentioned.
With regard to delisting, Sebi has recommended that delisting may perhaps be viewed as if 75 per cent of the total shareholding and voting rights are acquired against the present requirement of 90 per cent.
Also, it has recommended a relaxed framework for firms looking for to migrate to the most important board.
An IGP firm can migrate to the most important board, supplied 40 per cent of its total capital as on the date of application of migration is held by certified institutional purchasers (QIBs) as against the present criteria of 75 per cent, Sebi mentioned.
In 2015, Sebi had introduced the Institutional Trading Platform (ITP) with a view to facilitate listing of new age begin-ups. However, the ITP framework failed to evince interest.
Last year, Sebi renamed it as Innovators Growth Platform.