In the budget speech, the Honorable Finance Minister, announced that
the start ups and SMEs can get listed on the bourses without IPO. Accordingly,
SEBI has made the provision in ICDR guideline by introducing Chapter
XC whereby listing on the Exchange made possible without bringing Initial
Public Offer (IPO). SEBI has notified the same on 8th October 2013 and
also issued a detailed circular on 24th October, 2013. The benefits
of listing on ITP are as follows:
- Facilitate capital raising by small and medium enterprises including
start-up companies which are in their early stages of growth
- Provide easier entry and exit options for informed investors like
angel investors, VCFs and PEs etc., to and from such companies.
- Provide better visibility and wider investor base
- Relaxed compliance and cost effective listing
- Tax benefits to long term Investors
The Eligibility Criteria for the company desirous of listing are
as follows:
Regulatory Criteria:
- The company, its promoter, group company or director does not appear
in the willful defaulters list of Reserve Bank of India as maintained
by Credit Information Bureau (India) Limited (CIBIL).
- There is no winding up petition against the company that has been
admitted by a competent court.
- The company, group companies or subsidiaries have not been referred
to the Board for Industrial and Financial Reconstruction within a
period of five years prior to the date of application for listing.
- No regulatory action has been taken against the company, its promoter
or director, by the Board, Reserve Bank of India, Insurance Regulatory
and Development Authority or Ministry of Corporate Affairs within
a period of five years prior to the date of application for listing.
Financial Criteria:
- The paid up capital of the company has not exceeded 25 crore rupees
in any of the previous financial years.
- The company has at least one full year’s audited financial statements,
for the immediately preceding financial year at the time of making
listing application.
- The company has not completed a period of more than 10 years after
incorporation and its revenues have not exceeded 100 crore rupees
in any of the previous financial years
- At least one of the following criteria:
1. At least one alternative investment fund, venture capital fund
or other category of investors/lenders approved by the Board has
invested a minimum amount of 50 lakh rupees in equity shares of
the company.
2. At least one angel investor who is a member of an association/group
of angel investors which fulfils the criteria laid down by the recognized
stock exchange, has invested a minimum amount of 50 lakh rupees
in the equity shares of the company through such association/group.
3. The company has received finance from a scheduled bank for its
project financing or working capital requirements and a period of
3 years has elapsed from the date of such financing and the funds
so received have been fully utilized.
4. A registered merchant banker has exercised due diligence and
has invested not less than 50 lakh rupees in equity shares of the
company which shall be locked in for a period of three years from
the date of listing.
5. A qualified institutional buyer has invested not less than 50
lakh rupees in the equity shares of the company which shall be locked
in for a period of three years from the date of listing.
6. A specialized international multilateral agency or domestic
agency or a public financial institution as defined under section 4 A
of the Companies Act, 1956 has invested in the equity capital
of the company.