The BSE Startup Platform

In order to incentivize “Startups,” the Bombay Stock Exchange announced “BSE Startup Platform” on their BSE SME Segment. By listing themselves on this platform, Indian Startups can hope to raise money at more competitive rates. 

India is the 3^rd largest Startup hub, globally, as per Start-Up Report, 2017 by trade association – NASSCOM Indian Start-ups have witnessed momentous growth in the past decade and are poised to scale greater heights in times to come. The surge in the number of Start-ups in part can be attributed to better funding opportunities, predominantly through Angel Investors and Venture Capitalists.

Ease of access to reliable funding is a necessary condition for Start-ups to be able to scale up their operations, and for the Start-up ecosystem as a whole to take off and realise its true potential. To this end, the Bombay Stock Exchange, Asia’s oldest, has announced its intentions to be an enabler of the Indian Start-up success story.

In order to incentivize “Startups,” the Bombay Stock Exchange announced “BSE Startup Platform” on their BSE SME Segment. By listing themselves on this platform, Indian Startups can hope to raise money at more competitive rates.   

Who is eligible?

Companies having a “Startup” status and engaged in any of the following sectors

• IT/ITES
• Biotechnology & Life Sciences.
• 3D Printing
• Space technology
• E-Commerce
• Hi-Tech Defence
• Drones Tech
• Nano Technologies
• Artificial Intelligence
• Big data
• Enhance/Virtual Reality
• E-gaming
• Exoskeleton & Robotics
• Holographic Technology
• Genetic Engineering
• Wearable Computers/Inside body computer technology
• Any other Hi-tech based company

 Criteria for listing on “BSE Startup Platform”:

• The pre-issue paid up Equity Share Capital of the company should be a minimum of Rs. 1 crore.
• The company should be in existence for a minimum period of 3 years on the date of filing the draft prospectus with BSE
• There should preferably have investment by QIB investors (as defined under SEBI ICDR Regulations, 2009) / Angel Investors for a minimum period of 2 years at the time of filing of draft prospectus with BSE and such aggregate investment should be at least Rs. 1 crore.

Regulation 2(1) (zd) defines QIB (Qualified Institutional Buyer) as follows:

• A  mutual  fund,  venture  capital  fund [Alternative  Investment  Fund] and  foreign venture capital investor  registered with the Board;
• A foreign  portfolio  investor  other  than  Category  III  foreign  portfolio  investor, registered with the Board;
• A public financial institution as defined in section 4A of the Companies Act, 1956
• A scheduled commercial bank
• A multilateral and bilateral development financial institution;
• A state industrial development corporation
• An insurance  company registered with the  Insurance Regulatory and Development Authority
• A provident fund with a minimum corpus of twenty-five crore rupees
• A pension fund with a minimum corpus of twenty-five crore rupees
• National Investment Fund set up by resolution no.  F.  No.  2/3/2005-DDII  dated November 23, 2005 of the Government of India published in the Gazette of India
• Insurance  funds  set  up  and  managed  by  army,  navy  or  air  force  of  the  Union  of India
• Insurance funds set up and managed by the Department of Posts, India;
• Systemically important non-banking financial companies.
• The company should have positive net-worth
• The Company should not have been referred to National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code, 2016
• There should be no winding up petition against the company that has been accepted by the National Company Law Tribunal (NCLT)
• The companies listing on BSE Start-up Platform with the above-mentioned criteria will follow all the other conditions applicable for a listing of SME Companies under Chapter XB of “SEBI (ICDR) Regulations, 2009”, relating to disclosures, migration to main Board, etc.

The BSE named the following officers as a point of contact for details and clarifications on the Platform.

 Anuj Thakur | anuj.thakur@bseindia.com | 7045345256

 Mukesh Shah | mukesh.shah@bseindia.com | 9821627954

About the Author: 

Rutwik is an Engineer turned Lawyer specializing in Intellectual Property Rights Law. The IIT KGP alumnus, has advised various MNCs, Start-ups, and Innovators on matters relating to Patents, Designs, Copyrights and Trademarks and represents them before various Indian Courts.   

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