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The Securities and Exchange Board of India (SEBI) is likely to ease norms for startups looking to go public on the “Innovators' Growth Platform’ or IGP. The eased norms will give early-stage investors in startups a structured way to exit, according to an Economic Times report.
Among other changes, the regulator is also looking at altering rules for existing companies to delist, might endorse a bigger role for independent directors in delisting companies, reduce the timeline and improve disclosure standards.
These changes will likely be discussed during the SEBI Board meet on March 25, it added.
“The board is also likely to amend its Listing Obligations and Disclosure Requirements (LODR) to strengthen corporate governance and ease the compliance burden on listed entities,” an official told the paper.
Moneycontrol could not independently verify the report.
Startup IPO - Here’s what can change:
>> The proposal reportedly stipulates a compulsory shareholding period of only a year, down from two years currently, for investors with 25 percent or higher in the startup before it lists.
>> It proposes to raise the open offer trigger for investment deals to 49 percent from 25 percent.
>> It recommends a higher percentage of shares be allocated to anchor investors up to 60 percent of issue size on a discretionary basis before public issue begins.
>> It also recommends special rights to promoters of existing institutional investors.
>> It proposes that issuer companies are allowed to give differential voting rights (DVR) to promoters when seeking to list on the IGP.
>> For delisting, promoters must be allowed to provide an indicative price to gauge willingness to pay such price. Independent directors will be approached for their views.
>> For delisting, companies will have to disclose their voting patterns in the decision.