The Securities and Exchange Board of India (SEBI) has proposed to modify several rules to boost startups. It also proposed easier rules for startups to migrate from the Innovators Growth Platform (IGP) to the main board.
Under the new proposals, the compulsory shareholding period before listing for investors owning 25% or higher stake be halved to one year. It has also suggested raising the open offer trigger for investment deals, as well as recommended allocation of a higher percentage of shares to anchor investors during public issues and special rights to promoters and existing institutional investors.
Sebi has recommended to allow companies to allocate up to 60% of the issue size on a discretionary basis to anchor investors, prior to the issue opening. Further, it has proposed to increase the threshold for triggering open offers to 49% from 25%.
Sebi has also proposed to allow issuer companies seeking listing on the IGP to issue differential voting rights or superior voting rights equity shares to promoters. It said special rights such as board seats and affirmative voting rights for existing institutional investors holding in excess of 10% of capital should continue.