Capital markets regulator SEBI simplified its norms governing the IPO of companies in an attempt to encourage internet startups to raise funds domestically, rather than going abroad.
Under the new norms approved by SEBI’s board yesterday, the stock exchanges would have a separate institutional trading platform(ITP) for listing of start-ups from the new age sectors, including e-commerce firms, while the minimum investment requirement would be Rs 10 lakh.
Apart from this, the SEBI has also cut listing time for companies from 12 days from date of IPO to 6 days, and expanded the ASBA facility for IPO investments that would do away with cheque payments, which will help in fast-tracking the process of raising funds. ASBA (Application Supported by Blocked Amount) refers to an application mechanism for subscribing to IPO where the bid amount is blocked in a bank account and it would be now applicable to all kinds of investor category across all IPOs.
For their listing, Sebi has relaxed the mandatory lock-in period for promoters and other pre-listing investors to six months, as against three years for other companies
To prevent misuse of funds raised from public, Sebi said companies will have to keep the money in scheduled commercial banks till the amount is utilised for specified purposes.