Simplified Framework for Capital Raising by technological start ups - Institutional Trading Platform

1. iSPIRT – Indian Software Product Industry Round Table is a non-profit think tank formed by leading practitioners of the industry
to assist in the cause of building a healthy, globally-competitive and sustainable industry. Visit www.ispirt.in for more details.
Simplified Framework for Capital
Raising by technological start ups
INSTITUTIONAL TRADING
PLATFORM

2. Need for a separate platform
 Large number of technology intensive start-ups in India with disruptive business
models.
 With less stringent listing conditions overseas and access to capital, Indian
startups increasingly looking for fund-raising opportunities abroad.
 Need for a platform to allow “new-age companies” having an innovative business
model and belonging to the knowledge-based technology sector to list in the
country.
 To create a viable alternative to offshore listings of software product companies.
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3. Eligible issuers and investors
 Eligible issuers:
- Companies which are intensive in their use of technology/ IP/ data analytics/
bio-tech/ nano-tech and with at least 25% of the pre-issue capital being held
by QIBs; or
- Companies in which at least 50% of the pre-issue capital is held by QIBs.
 Eligible investors:
- Institutional Investors (QIB as defined in SEBI (ICDR) Regulations, 2009 along
with family trusts, systematically important NBFCs registered with RBI and the
intermediaries registered with SEBI, all with net-worth of more than Rs. 500
crore)
- Non-Institutional Investors (NIIs) other than retail individual investors
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4. Conditions for listing
 Allocation of issue – 75% for institutional investors, 25% for non-institutional
investors.
 Minimum application size - Rs. 10 lakhs, minimum trading lot - Rs. 10 lakhs.
 Minimum number of allottees – 200.
 Flexibility on providing basis for issue price - may contain disclosures other than
standard valuation parameters (P/E, EPS).
 Limited disclosures for objects of the issue.
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5. Obligations post-listing
 No person to hold more than 25% of post-issued capital.
 Uniform lock-in of the entire pre-issue capital - 6 months from the date of
allotment.
 Issuer company to have the option to migrate to main board after 3 years subject
to compliance with eligibility requirements of the stock exchanges.
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6. Advantages of the new platform
 No requirement of showing mandatory track record of distributed profits.
 No requirement of having detailed disclosures in relation to objects of issue, basis
of issue price etc.
 No cap on amount raised for general corporate purposes.
 New platform to provide an exit opportunity to the investors.
 Relaxed requirement for lock-in of shares.
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7. Thank you for being
part of this
movement!
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