Securities and Exchange Board of India
SEBI on Thursday announced several loopholes in the provisions to encourage listing of startups.
Reduced holding period for pre-issue capital
According to the current rules, before listing of a startup, the promoter had to hold 25% of the pre-issue capital for 2 years. However, according to the new rule, this period has been reduced to 1 year.
Investors cannot sell their stake for 30 daysSEBI has also approved startups that it can allocate 60 per cent of the issue size to eligible investors before listing. However, it will have a lockin period of 30 days. That is, investors cannot sell their stake for 30 days. For the takeover of the listed company on the innovator growth platform, an open offer will have to be brought for 49 per cent instead of the current 25 per cent.
Listing on the main board of the stock exchange also made the rules easier
SEBI said, “If a startup company is acquired, there is a change in shareholding or voting rights, then an open offer has to be brought.” SEBI has also simplified the rules of listing on the main board of the stock exchange of companies listed on the Innovator Growth Platform.
SEBI said that among the startups which are not profitable, if more than 50 per cent is held by qualified institutional buyers, then they can join the main board of the stock exchange. Earlier this limit was 75 percent but now it has been reduced.