SEBI Became Strict Regarding The Listing Of Startups

SEBI became strict regarding the listing of startups in the stock market, made strict rules.

Markets regulator SEBI has said that new-age technology companies, preparing for a listing of their shares.

These tech- companies should disclose the key performance indicators related to reaching the base price of the issue in the offer document.

Let us tell you that in 2021, IPOs of Fintech companies like Paytm, Zomato, and other technology companies came.

These offers of shares did not give significant returns to the investors. The shares of these companies are in slim condition since the listing. That’s why SEBI has tightened the rules of IPO.

SEBI became strict regarding the listing of startups: Companies have to do this before applying for IPO.

The Securities and Exchange Board of India (SEBI), in a consultation paper, said that while applying for initial public offering (IPO) approval.

These companies should be exempted from their valuation on the basis of the issue of fresh shares and shares acquired in the last 18 months and also related disclosures should  be made.

Brings IPO to raise capital.

This move of SEBI has been taken in the context of the launching of IPOs in the last few months to raise finance on behalf of new technology companies.

Many of these technology companies had no track record of operating profit in the three years prior to the issue.

Companies focus on business expansion rather than profit-making.

Such companies usually do not reach a position of making a profit for a long time.

The reason for this is that even before reaching the ‘no profit no loss situation, these companies focus on expanding their business rather than making a profit in the initial years.

Send comments and suggestions about it by March 5th.

While issuing this advisory for disclosure provisions related to IPOs of loss-making companies, SEBI has said that comments and suggestions can be sent in this regard by March 5.