List Your Startups on BSE Without Initial Public Offering (IPO) from July 9

In a major move to boost startups, BSE is launching a BSE Startup Platform at its SME (small and medium enterprise) segment from July 9th, 2018.

The new  startups from the sectors like IT, ITES, bio-technology and life sciences, 3D printing, space technology, e-commerce etc. will get the benefit of listing on BSE.

Further, this new platform will facilitate listing of companies from the new evolving arenas. This includes artificial intelligence, drones, big data, virtual reality, e-gaming, exoskeleton, robotics, holographic technology, genetic engineering, hi-tech defence, among other sectors.

National Stock Exchange (NSE) had earlier in 2013, launched a platform for the startups, the NSE’s Emerge- Institutional Trading Platform (ITP), to list them with or without an initial public offering (IPO), where the institutional investors can invest in the startups.

However, this project did not to get popularity. Therefore, SEBI has formed a group like Indian Software Product Industry Round Table (iSPIRT), the Indian Private Equity and Venture Capital Association (IVCA), The Indus Entrepreneurs (TIE), merchant bankers, law firms, and stock exchanges to review its ITP framework.

SEBI is working hard to improve the startup environment in the economy. As a result, SEBI has accepted to double the investment bracket to INR 10 crore of Angel Investors.

Additionally, as per Income Tax Department, the start-ups approved by an inter-ministerial panel are exempted from the Angel tax, which is levied on companies issuing shares to investors more than their fair value, treating it as income from other sources.

Listing on BSE Startup Platform: Criteria for Startups

• The company’s pre-issue paid-up equity share capital should be minimum of Rs 1 crore.
• The startup entity should be in existence for a minimum period of 3 years on the date of filing the draft prospectus with BSE.
• The startup company should preferably have an investment by QIB investors/ angel Investors for a minimum period of 2 years at the time of filing of draft prospectus with BSE, and such aggregate investment should be at least Rs 1 crore.
• The company should have positive net worth.
• The company intending to list should not have been referred to National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code, 2016.
• No winding up petition against the company that has been accepted by the National Company Law Tribunal (NCLT) must exist.

The new trading platform of BSE will encourage new entrepreneurs to take initiatives and bring out new things. The investors can also take part in boosting new ideas. The private equity group will get the boost from the initiative by BSE. BSE with this initiative will bring more liquidity to early stage investments and will able to fulfill the entrepreneurs’ dreams.