IPO-less listing of tiny cos not against retail interest, says SEBI chief

Listing of shares by start-ups and small and medium enterprises without initial public offering is not aimed to drive away retail investors.

Entities failing to raise needed capital after exhausting all available fund raising options alone shall list on this special platform, said UK Sinha, Chairman, Securities and Exchange Board of India (SEBI).

“Safeguarding interests of genuine investors will remain paramount while promoting alternative fund raising mechanisms for the industry,” Sinha said.

Listing of shares on exchanges without an IPO aids price discovery and liquidity and grants private equity and venture capital easier exit options.It also provides better visibility, wider investor base and greater fund raising capabilities to aspirant SMEs/start-ups.Investors do not need to pay capital gains tax on the transaction either. Such short-term gains on a non-market platform attract up to 20 per cent.Sinha said that initiatives aimed at facilitating SME listing can be traced back to the 1990s.