Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Start-up norms fail to woo promoters?
Fri, 17 Jul Pre-Open

India's start-up activity has been booming since some time now. A number of start-ups in India have managed to attract attention and raise venture capital funding. Large part of these funds is raised abroad and these funds are still curiously scouting for their next India deal.

An article in The Economic Times highlights about the growing magnitude in the fund raising of these start-ups. The start-ups, mostly internet businesses, have raised over Rs 509 bn in venture funding since 2012. This is far more than the amount raised by the mature companies going public that is around Rs 134 bn through initial public offerings (IPOs) for the same period.

With the increasing activity in these start-ups and to make the capital funds domestically available, the capital market regulator had recently announced a new set of relaxed norms for start-ups to list on a proposed Institutional Trading Platform (ITP).

As per the proposal in the ITP guidelines, SEBI is has relaxed the disclosure norms. Importantly, the regulator has removed profitability clauses for such start-ups. Further, they have set a minimum investment floor of Rs 10 lakh. Over and above the lock-in period, minimum allottees and so on are part of these norms. The regulator also has kept small, retail investors out. The companies opting to list themselves can shift to stock exchanges in three years, given they are at par with the norms with the exchanges.

However, these relaxations do not seem to be very enticing for the community. Some promoters still believe that these norms are not at par with the international standards and the regulator needs make them more relaxed to encourage startups to list on this platform. According to some experts, while the profitability norm has been relaxed for initial years, it still remains at the core of the system.

In our view while, these norms might make difficult for the start-ups to access the funds from the domestic market, however when the question of accessing capital markets comes into play, protecting the interests of investors also becomes extremely important. Given the business dynamics of these new-age start-ups, SEBI has outlined a number of sweeping changes in the regulatory requirements for them. However it appears to be quite clear that investors' interest is not relaxed.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary


What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "Start-up norms fail to woo promoters?". Click here!

  

Views on News

Top 5 Recent IPO Developments You Should Know (Views On News)

May 12, 2021

So far in 2021, IPOs in India have raised nearly US$ 3 bn, the best start to the year since 2018.

How Did Mindtree Perform in Q4FY21? (Company Info)

Apr 20, 2021

Here's the rundown on the company's latest quarterly results.

UTI Flexi Cap Fund: Identifying Stocks with Strong Earnings Quality (Outside View)

Jun 11, 2021

PersonalFN's analysis on the features and performance of UTI Flexi Cap.

My 'Unlock' Investments (Fast Profits Daily)

Jun 11, 2021

The best unlock investments you can make in the market.

How I Discovered a 400-Year-Old Open Secret to Extreme Wealth (Profit Hunter)

Jun 11, 2021

Charlie Munger's open secret about investing success.

More Views on News

Most Popular

Don't Break These 5 Intraday Trading Rules (Fast Profits Daily)

Jun 1, 2021

To become a better intraday trader, follow these rules religiously.

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

Is the RBI's 'Bubble Talk' Signalling a Market Crash? (Profit Hunter)

May 31, 2021

Is the Indian central bank correct in warning you about a market crash?

Rs 2 Trillion Stimulus Coming to a Stock Market Near You (Profit Hunter)

Jun 2, 2021

Get ready to profit from a massive stimulus that you've never seen before.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Jun 11, 2021 (Close)

MARKET STATS