Currently, the market regulator has created a particular platform to cater to the startups on the lookout for a listing, which known as Innovators Growth Platform (IGP). This is a distinct segment platform that may solely be accessed by huge ticket establishments and rich buyers, and therefore has restricted liquidity in comparison with the mainboard the place all of the bluechip shares commerce.
A startup that has listed on the IGP platform can migrate to the mainboard offered the corporate meets a number of situations, together with a profit of a minimum of Rs 15 crore within the final three years.
However, if the startup doesn’t have the revenue monitor report, it may nonetheless migrate to the mainboard offered 75% of the shareholders of the corporate are institutional buyers. Several startups and VC corporations made representations to Sebi in search of a leisure to this rule because it was troublesome to realize 75% institutional holding.
Even among the many blue-chips, solely a handful of firms have such excessive institutional holding. Based on the trade suggestions, Sebi proposed to decrease the brink to 40% from 70%.
However, MCA opposed this leisure saying the restrict was too lenient and as a substitute beneficial that the brink needs to be 50%. Sebi ultimately agreed. Emails despatched to Sebi and MCA remained unanswered.
“MCA has commented that the 40% dilution is too low and must be reviewed so that the Company does not take unfair advantage of having first listing with IGP and then getting moved to Mainboard,” mentioned minutes of Sebi board assembly dated March 25,2021. “In view of the comments from MCA…we may reduce this stipulation of 75% of capital with QIBs (qualified institutional investors) to 50% instead of 40% as proposed in the consultation paper.”