MUMBAI: The Indian capital markets regulator, Securities and Exchange Board of India (SEBI) made some radical changes to the listing norms on the Innovators Growth Platform (IGP), for startups which include reducing from two years to one, the time early-stage investors need to hold 25% of pre-issue capital, and allowing IPO-bound startups to allocate up to 60% of the issue size to any eligible investor with a lock-in of 30 days on such shares.

So far startups going public are barred from making discretionary allotments.

SEBI had introduced the Institutional Trading Platform (ITP) in 2015, with a view to facilitating the listing of new-age start-ups, however, the framework filed to evince any interest and last year the regulator had renamed it as the IGP.

SEBI has also relaxed the threshold trigger for open offers from the existing 25% to 49% for startups, barring situations where there is a change in management control of the target company.

SEBI has said that the move aims at boosting the listing of start-ups, however, it is seen as a move to stem the potential exodus of local firms to foreign capital markets

SEBI in its announcement said, "The board has approved the proposals with respect to framework of IGP under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, with an objective to make the platform more accessible to companies in view of the evolving start-up ecosystem." 

Other proposals approved by SEBI also include easing delisting requirements and relaxation in guidelines for migrating to mainboard.

SEBI said for delisting, the Reverse Book Building mechanism will not be applicable, and for computation of offer price, the floor price will be determined in terms of Takeover Regulations, along with delisting premium as justified by the acquirer/promoter.

"The delisting should be considered successful if the post-offer acquirer or promoter shareholding, taken together with the shares tendered and accepted, reaches 75 per cent of the total issued shares of that class; and at least 50 per cent shares of the public shareholders are tendered and accepted," it regulator said in its announcement.