Sebi eases superior voting rights norms to aid startup listing

MUMBAI: In a move that is likely to further aid the listing of startups in India, the Securities and Exchange Board of India revised certain regulations pertaining to superior voting rights shareholders in companies.

The current framework allows issuance of superior voting rights shares to promoters or founders holding an executive position in the company desirous of listing on the Main Board. However, a subsection of the framework was being seen as restrictive and onerous to comply with for founders who had diluted their holding but held superior voting rights shares.

Under the current framework a superior voting rights shareholder could not be part of the promoter group at the time of listing if the collective net worth of the promoter group exceeded Rs. 500 crore.

Sebi has today eased this restriction by mandating that the superior voting rights shareholder’s net worth should not exceed Rs. 1,000 crore at the time of the proposed listing of the company.

The minimum gap between issuance of superior voting rights shares and filing of Red Herring Prospectus has also been reduced to three months from the existing requirement of six months, SEBi said.

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