Mumbai: Capital markets regulator Sebi today said that by June it will finalise norms for start-ups which will incentivise them to list within the country, and sees a revival in the primary markets over the next 6-9 months.
“Sebi plans to come out with the discussion paper and set to come out with the regulations for start-up companies by June to allow such companies to list within the country. Many new technology companies have several issues and are exploring overseas listing,” Sebi Chairman U K Sinha said at the 6th Capital Markets Summit organised by CII here.
“We need to carve out certain set of rules. We may provide them relaxation in profitability and objects of the issues as these companies work on specific business model,” he said.
On the primary market, Sinha said that in spite of the formation of new government and a great budget, it continues to be subdued. In the 11 months of FY'15, only Rs 1,500 crore has been raised and the pipeline is not strong at the moment, he added.
When country is projected to grow at 7 per cent and foreign portfolio investment touched record USD 46 billion mark, why primary market is subdued, he asked, seeking suggestions from industry to revive it.
However, the retail investors have started returning to the market as lakhs of new demat accounts have been opened. Corporate India also hopeful of revival in primary market over the next 6-9 months period and Sebi will continue its role of developing the market, Sinha said.
Sebi is also considering issuing new regulations for municipal bonds issues and discussing with RBI the proposal to set up India's first International Financial Services Centre (IFSC) in Gujarat's GIFT City.
To deepen capital markets, SEBI also pitched for allowing investment of pension money into various securities instruments and to create an enabling environment for REITs to flourish.
Sinha said he is hopeful of Real Estate Investment Trusts (REITs) and sees huge potential for revival of secondary markets. Nearly 32 per cent of IPO's in Singapore are through REITs.
Providing a fillip to investments in realty and infrastructure sectors, Finance Minister Arun Jaitley last month announced in his Budget speech a rationalised capital gains tax regime for the sponsors of newly-created business structures - REITs and Infrastructure Investment Trusts (INViTs). The government has already resolved the issue of capital gains tax. Sebi has raised some concerns about tax issues with the government, he added.
Commenting on FMC's merger with Sebi, Sinha said, “We are working together with Ministry of Finance and expressed the process will be completed smoothly.” Announced in the Union Budget 2015-16, the merger would help in streamlining the regulations and curb wild speculations in the commodities market.
After the merger, we will have new products and new depth in the commodity markets, Sinha said. On the issue of corporate governance, Sinha said India's investors protection rating has improved to 7th in 2014 from 34 in 2013 and 49 in 2012. The regulatory environment will benefit the country's investors.
On appointment of women directors on the company's board, he said, as the deadline ends tomorrow, “I suspect that the number of companies have not yet found competent women directors”.
Listed companies are required to have at least one woman director before April 1 and recently, Sebi also indicated that there would not be any further relaxation on the deadline.
These guidelines, part of Sebi's Corporate Governance Code, were issued way back in February 2014 and the initial deadline of October 1, 2014 was extended by another six months.