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Sebi eases IPO norms for startups

Published on June 24, 2015 19:08:40 PM

Markets watchdog Sebi (Security Exchange Board of India) has made a series of announcements regarding FMC-Sebi merger, IPO investments, the listing and fund-raising norms for start-ups in India among others.

 The major announcements are as follows:

•             With the intention to boost start-ups in India, market regulator has relaxed fund-raising and listing norms for start-ups which include e-commerce firms too. Under the latest norms Rs 10 lakh is set as minimum investment.

•             In order to make the Initial Public Offer (IPO) process easier, market regulator has made IPOs investment cheque-free. Starting from January 1, 2016 the time required to list the companies is reduced to six days.

•             Sebi also said that Forward Markets Commission (FMC) – Sebi merger will be completed by end of September. This merger will helps to launch new products such as options, curb wild speculations in commodities market, facilitates domestic and foreign institutional investors participation.

•             Sebi has listed new set of norms for re-classification of promoters. According to the new norms, an outgoing promoter has to give up all special rights and control and dilute stake to 10 per cent to become a public investor.

•             To prevent misuse of the funds raised from public, companies have to put the IPO funds in scheduled commercial banks till utilisation.

•             Sebi has partly obliged with government on Offer for Sale route for PSU disinvestment.  Companies can now disclose such plans two banking days before the share sale unlike the two trading days earlier.

Meanwhile, Sebi has barred Jugantor Realty,  Matribhumi Projects, and Waris Finance and Investment and their directors from issuing any offer document or advertisement for soliciting money from the public through issue of securities for allegedly violating public issue norms.