New trading platform for start-ups, e-commerce firms by SEBI

Start-ups promoted by Tech students have been going to the overseas to raise funds from Venture Capitals and Private Equities. Now, the new norms will make fund raising easier in India, says e-Commerce Association of India (ECAI).

By Sai Nikesh D

In a move to encourage new business entrants, the Securities and Exchange Board of India (SEBI), on Tuesday, announced setting up of an ‘alternative trading platform’ dedicated for start-ups, including e-commerce firms, in the country.

The capital market regulator, by relaxing its regulations, provides an opportunity for start-ups to list and raise funds on domestic stock exchanges, instead of going overseas.

“Indian start-up space is very vibrant and the country is ranked number five as far as start-ups are concerned. More than 3,100 start-ups are there in the country and a large number of M&As have also happened,” said SEBI Chairman U K Sinha, in an official statement.

“However, most of these start-ups were thinking of listing outside. We have made a very special provision for start-ups,” he noted.

Expressing his opinion on SEBI’s move, Vipul Sharma, Director & Head- Strategy & Communications, e-Commerce Association of India (ECAI), said that the new rules are intended to attract start-ups to list in the country, rather than looking for funds from a foreign bourse.

Start-ups promoted by Tech students have been going to the US and other countries to raise funds from Venture Capitals and Private Equities.

Now, the new norms will make fund raising easier in India, ensure higher liquidity and would also help in bringing down Initial Public Offering Costs (IPO), he pointed out.

Replying to a query on ‘to what extent the government’s policies are promoting e-Commerce platforms in the country’, he said, “The measures being undertaken by the government shall go a long way in streamlining the growth of e-commerce industry in India.”

When sought opinion on ‘government’s moves to promote domestic products (technology, agri, textiles, etc) through e-Commerce platforms’, he said, “There are signs that the e-Commerce market is expanding by leaps and bounds and the incentives by the government, be it relaxing norms by SEBI and setting up of new trading platforms for start-ups or providing tax breaks for electronic payment adoption, shall definitely add value to the start-up eco-system in India.”

We have seen a lot of government organisations realizing the potential of the sector, with the recent resurgence of India Post, by their tie-ups with various e-commerce companies in India for mutual benefits.

More recently we have seen Snapdeal collaborating with the Himachal Pradesh government for setting up Special Ecommerce Zones in the region in order to benefit businesses and generate employments, he noted.

“ECAI has always maintained that e-Commerce is the best way to organise the unorganised market in India, be it retail, travel and even real estate now,” he said and exuded confidence that ‘these sort of incentives by the government would not only increase the presence of e-commerce, but also aid in developing an entire ecosystem for trade and manufacturing to flourish in India.’

He says, “Indian government’s ambitious projects for Digital India and employment generation can be realized in a quicker way by integrating with the e-commerce sector’.

This article was published in The Dollar Business on June 24, 2015

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