Ministry of Corporate Affairs asked SEBI to change the Startups Listing Rules

The Ministry of Corporate Affairs (MCA) has asked market regulator Sebi to tighten the rules for the listing of startups. The ministry has asked SEBI to withdraw some of the concessions given in the listing to startups.

Currently, the market regulator has prepared a special platform Innovators Growth Platform (IGP) for startups looking for a listing. This is a special platform, in which only high-value and highly-capable investors can put money. Because of this, its liquidity is quite limited.

However, if the startup is not making a profit, they can also be listed on the mainboard, provided the institutional investors hold 75 percent stake in the company. However, many startups and venture capital firms have been seeking relief in the institutional investors’ stake of 75 percent.

Talking about the big companies, institutional investors only have more stakes in limited companies. According to information received from the industry, SEBI has proposed to reduce this limit from 70 percent to 40 percent.

There was no response to emails sent to SEBI and MCA in this regard. However, the MCA said that this concession is much more lenient and that the limit should be up to 50 percent, for which SEBI agreed.