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SEBI approves proposals to ease listing for start-ups on the innovator growth platform.

The Securities and Exchange Board of India on Thursday approved various chief proposals to ease the listing process for start-ups on the innovator growth platform.

The capital markets regulator has approved reducing the period where eligible investors in a start-up before the public issue have to hold 25 percent of the pre-issue capital to one year from two years previously.

The regulator has also allowed start-ups to allocate up to 60 percent of the issue size on a discretionary basis, before issue opening, to suitable investors with a lock-in period of 30 days on such shares. Moreover, the open offer trigger has been increased from 25 percent to 49 percent in the event of a takeover of a company listed on the Innovator Growth Platform.

“However, irrespective of acquisition or holding of shares or voting rights in a target company, any change in control directly or indirectly over the target company will trigger an open offer,” Sebi stated.

The regulator has also eased the rules around the migration of a start-up listed on the Innovator Growth Platform to the Main Board of a stock exchange. Sebi said that start-ups that do not meet the conditions of profitability, net assets, and net worth for migration to the mainboard can now do so as long as 50 percent of the company is in the hands of qualified institutional buyers as opposed to 75 percent required previously.

Delisting under the start-up framework will be regarded successful if the post-offer shareholding of the acquirer, taken together with the shares tendered and accepted, reaches 75 percent of the total issued shares of that class and at least 50 percent shares of the public shareholders are tendered and accepted, Sebi said.

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