“Startups are young companies founded to develop a unique product or service, bring it to market and make it irresistible and irreplaceable for customers”, says forbes.com. 1
India is the third largest startup destination globally. To help more startups to emerge and be successful, the BSE launched the ‘Startup Platform’ on December 22, 2018 after SEBI’s approval.
Why Startup Platform?
Such a platform was developed to aid listing of new age companies in sectors such as IT, ITES, Biotechnology and Life Sciences, 3D printing, Space Technology, Hi-tech Defense, Drones, e-gaming, Robotics and E-commerce. The platform helps to raise equity capital for trade expansion. It enhances the credibility of the associated firm by making sure that the firm’s operations are transparent. It also helps in building confidence among customers and investors. The platform allows loss-making startups to also join them and launch their IPOs. These startups can raise capital from venture capital and private equity firms rather than from the public alone. Depending on the performance of the stock, startups can migrate to the main board of the stock exchange after two years. It helps startups to grow and create meaningful economic impact.
How it benefits investors and market makers?
BSE’s startup platform offers a friendly environment to both entrepreneur and investor. It helps entrepreneurs raise equity capital for growth and expansion of their startups in a cost effective manner. It provides investors with the opportunities to identify and invest in good companies at an early stage. It also enables the listing of SMEs from the unorganized sector scattered throughout India, into a regulated and organized sector.
Guidelines for listing 2
Interested companies should be registered as a startup with MSME/DIPP or its paid-up capital should be minimum INR 1 Cr, with post-issue paid-up capital not exceeding INR 25 crores. To be listed in this platform, preferably, there should be an investment by QIB investors/angel investors /accredited investors for a minimum period of 2 years at the time of filing of draft prospectus with BSE. Also, the net worth of the prospective startup company should be positive.
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