SEBI puts relaxations on norms to boost startup listing

The security market regulator SEBI put an ease on norms to promote the listing of start-ups.

The action took place on March 25 which also includes a reduction in the holding period for pre-issued capital.

According to the report, the meeting announced the introduction of a sustainability report. It is a report which reflects the contribution from the capital towards feasible economic activities.

The report name goes by the name Business Responsibility and Sustainability Report (BRSR). This is the replacement of the former Business Responsibility Report (BRR).

In addition, listed entities are entitled to prepare the report.

The top 1000 listed companies based on market capitalization need to make the report on a non-mandatory basis for 2021-22. The entities have to prepare it on a compulsory basis from FY22-23.

Additionally, the meeting formulated the flexibility of venture capital funds to invest.

As per the relaxations, the ease provided to AIF funds to invest in other units of AIF  encourages smaller funds.

Alternative Investment Funds are the collective vehicle that raises money from a number of investors who put money in these funds. These funds have a wide range of alternatives like hedge funds, private equity funds, real estate funds.

Furthermore, the experts believe that this action undertaken by SEBI will encourage start-ups to list in the Indian market. Many Indian start-ups like Nykaa Poilicybazaar and more look forward to listing themselves in the overseas market.

Earlier, in 2019 SEBI introduced a platform called Innovators Growth Platform. This aimed towards listing the new ventures established in the market. Initially, the start-ups focus on growth than improving profitability. Consequently, they incur losses in the initial years of the business.

Hence, SEBI took initiative to introduce the listing platform. However, SEBI may undertake changes in the future.

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