Simplified Framework for Capital Raising by technological start ups - INSTITUTIONAL TRADING PLATFORM
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Simplified Framework for Capital
Raising by technological start ups
Need for a separate platform
Large number of technology intensive start-ups in India with disruptive business
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
To create a viable alternative to offshore listings of software product companies.
Eligible issuers and investors
- 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.
- 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
- Non-Institutional Investors (NIIs) other than retail individual investors
Conditions for listing
Allocation of issue – 75% for institutional investors, 25% for non-institutional
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.
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
Issuer company to have the option to migrate to main board after 3 years subject
to compliance with eligibility requirements of the stock exchanges.
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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