New Delhi: Capital markets regulator on Monday said it would propose tax concessions for startups to the government who decide to raise money from Indian markets. “I like to assure you that we will take up the tax issue with the government,” chairman of Sebi, UK Sinha said at an event where demand was raised for a friendly tax regime for a startups so that they are encouraged to list in India.
He said the regulator is willing to consider more suggestions that might come to make it easy for startups to raise funds in India.
So far the startups in India have raised capital mostly from investors in countries like Singapore and the US. In August, the Sebi had notified relaxed listing norms for startups. Under the new norms, bourses would have a separate institutional trading platform for listing of startups from the new age sectors, including e-commerce firms, while the minimum investment requirement would be Rs 10 lakh.
For their listing, Sebi has relaxed the mandatory lock-in period for the promoters and other pre-listing investors to six months, as against three years for other companies.
Various market participants have suggested several changes to the norms with regard to listing of start-ups. Among others, one suggestion is of doing away with the requirement of at least 25 per cent of the pre-issue capital to be with institutional investors for technology start-ups, while it is 50 per cent of companies from other areas.
Sinha said that initial public offers by startups and small and medium businesses have begun to develop in India. “The perception, however, is building that startups are flying away from India wooing investments in countries like USA and Singapore, but this remains a perception at a time when such a thing has begun to happen,” he said.
This will change in due course and India will shortly begin witnessing sufficient conducive conditions and climate for startups to stay put in India and diversify their operations from being based here, he added
“The capital market regulator is trying its best to create conducive climate for startups to fuel India’s growth story by way of restricting their migration to countries,” Sinha said.
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