SEBI reduces minimum issue size on Social Stock Exchanges by 50% to Rs 50 lakh

28 Nov 2023 , 11:34 AM

On November 25, the Securities and Exchange Board of India (SEBI) reduced by half the minimum issue size for non-profit organizations (NPOs) on the Social Stock Exchange (SSE).

Following the Board meeting, Sebi issued a press statement stating that the minimum issue size for the public offering of zero-coupon zero principal instruments (ZCZP) by non-profit organizations (NPOs) on SSE has been reduced to Rs 50 lakh from Rs 1 crore.

It was stated that this action was taken to offer impetus to non-profit organizations on SSE for raising funds. The regulator has also decreased the minimum application size for public issuances through ZCZP by organizations on SSE to Rs 10,000 from Rs 2 lakh before, in order to allow a wider range of customers, including retail, to participate.

Sebi has also replaced the term ‘social auditor’ with ‘social impact assessor’ to bring comfort to companies and to show a favourable attitude towards the social sector.

The market regulator stated in its consultation document posted on 29 August that the exchange was in its early stages and that NPOs could struggle to collect Rs 1 crore from a small group of investors.

Sebi also stated that the minimum application size for NPOs would be decreased from existing Rs 2 lakh to Rs 10,000. SEBI said that reducing the minimum application size threshold would benefit a large number of investors who would like to subscribe to Zero Coupon Zero Principal Instruments of more NPOs.

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