Sivasubramanian Ramann, executive director, SEBI said that, unlike the one for the SMEs, the proposed platform will also allow start-ups to list without IPOs.
SEBI has earlier debated for a separate platform for small and medium enterprises (SMEs) and after much instigation from them as well as the government, both the BSE and NSE have launched one. The SMEs can now access markets without filing the long-red herring prospects as well as prior SEBI permission via the platform.
During the Union Budget FY14, Finance Minister P Chidambaram proposed allowing SMEs and the start-ups to list on the exchanges without the mandatory initial public offering (IPO) process so long as the issuance of the securities is limited to 'informed investors.' The move will allow SMEs and start-ups to list their shares issued on the basis of private placements to a maximum of 49 investors at a time, thereby providing a certain level of liquidity for early stage investments in the said companies. This will also provide venture and private equity investors an attractive additional exit route.