Start-Ups Current Affairs - 2019
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Market regulator Securities and Exchange Board of India (SEBI) has constituted Group to look into existing Institutional Trading Platform (ITP) framework and suggest measures to facilitate listing of startups. Its members include representatives from Indian Software Product Industry Round Table (iSPIRT), Indian Private Equity and Venture Capital Association (IVCA), Indus Entrepreneurs (TIE), law firms, merchant bankers and stock exchanges.
Terms of Reference of the Group
The group will look into existing ITP framework and suggest measures to facilitate listing of startups. It will revisit current ITP framework and identify areas, if any, which require further changes. It will also address issues relevant to ITP which group may like to assess. The group will submit report to SEBI within period of one month i.e. by July 2018.
Institutional Trading Platform (ITP) framework
ITP framework is window on stock exchanges where e-commerce, data analytics, bio-technology and other startups can list and trade on their shares. It allows companies to list without necessarily doing an Initial Public Offer (IPO) of equity. SEBI had introduced it in 2013 to facilitate listing of new age companies, but it had failed to gain any traction.
Benefits of listing on ITP
It facilitates capital raising by small and medium enterprises (SMEs) including start-up companies which are in their early stages of growth. It provides easier entry and exit options for informed investors like angel investors, Venture Capital Funds (VCFs) and Private Equities (PVs) etc. to and from such companies. It also provide better visibility and wider investor base. It also relaxes compliance and cost effective listing and provide tax benefits to long term Investors.
Indian Institute of Management Ahmedabad’s (IIMA’s) centre for innovation, incubation and entrepreneurship (CIIE) has launched $25 million ‘Bharat Inclusion Initiative’ to fund start-ups. CIIE was founded at IIMA to support entrepreneurs and turn business ideas into viable businesses models. It partners with industry experts, mentors, corporates, IIMA community and investors to help incubate early-stage start-ups.
CIIE’s ‘Bharat Inclusion Seed Fund’ aims to provide continuum of solutions to inclusion focused tech entrepreneurs across the pre-incubation, seed and scale-up stage and help them jump to the next orbit. It will mentor and invest in start-ups in the early stage and seed segment over the next three-four years. The fund will look at start-ups in areas such as financial inclusion, livelihood, education, agriculture, and health. It has set aside $22.5 million to invest in pre-Series A technology start-ups. The initiative has received initial pledge of $12.5 million from Bill and Melinda Gates Foundation, Michael and Susan Dell Foundation and Omidyar Network.