With the aim of boosting India’s startup ecosystem, the Securities and Exchange Board of India, the body that regulates Indian stock markets, has relaxed listing and fund raising norms for the startups.
According to India’s IT industry trade body Nasscom’s key findings of the India Start-up Report 2014, there are:
- ~3100 startups present in India, 3rd largest base in the world. The India Expert assume that Nasscom refers to professionally funded startups, i.e. those which receive angel or venture funding.
- 800+ startups are being set up annually
- By 2020 there will be ~11,500 startups employing over 250,000 people
- ~300 VC/ PE & ~225 angel investment deals worth over $ 2 billion
- over 20 M&A’s worth ~ $1 billion inthe last 3 years
Despite the optimism of India’s technology startup scene, only 13% of stock market valuation in India is from the technology sector as compared to over 40% in the United States, according to software product thinktank, iSPIRT.
The changes envisaged by the Securities and Exchange Board of India include:
- the creation of a separate institutional trading platform which will be linked to India’s two existing stock exchanges
- shorter lock-in periods for initial investors
- simplified disclosure norms
- reviesed IPO pricing rules
- a minimum investment of just $16,000 by retail investors.
“We are happy with the outcome” said Sharad Sharma, chairman of iSPIRT. These changes are expected to come into effect by the end of this year, reports Forbes.
