To provide a boost for startups seeking to get listed,capital markets regulator Sebi’s board has approved easing of norms foraccreditation of investors willing to invest in such new-age entities.
At a meeting here, the Sebi board approved a framework forthe process of accreditation of investors for Innovators Growth Platform, whichwill be the name of the stock exchange platform where new-age startups would belisted.
Under this framework, the investor having a demat accountwill make an application to the stock exchanges or depositories to berecognised as an ‘accredited investor (AI)’.
The exchanges and depositories will grant accreditation tothese investors for a period of three years, after ascertaining theireligibility.
Earlier in December 2018, the Sebi’s board had approved anumber of other measures to make it easier for startups to get listed on theInnovators Growth Platform (IGP).
The relaxation in the norms came after tepid market interestto the existing platform and demands from various stakeholders to make thenorms easier and the platform more accessible in the wake of expandingactivities in the Indian startup space.
While detailed eligibility and other norms for AIs would benotified by Sebi later, sources said it is being proposed that an individualwith total annual gross income of Rs 50 lakh and a minimum liquid net worth ofRs 5 crore will be considered.
In the case of body corporate, the net worth requirementwould be Rs 25 crore.
In case, the financial status changes during the eligibilityperiod, the AI will have to inform stock exchanges and depositories about the same.
At the time of application for listing by a company on theIGP, the merchant bankers will have to carry out due diligence regarding theeligibility of AIs.