SEBI wants startups to name their promoters

Founders of multiple tech companies avoid being classified as promoters when they list but continue to call the shots. The regulator aims to fix that.

The Securities and Exchange Board of India wants founders with a 10% stake in their companies at the time of an IPO to classify themselves as promoters, according to a report in The Financial Express.

The regulator’s move, if it takes effect, could have a bearing on a bunch of startups planning public issues of shares. With private equity investors holding the bulk of shares in many of them, founder stakes have come down to single digits. This will make it difficult to identify a promoter, and possibly delay the process. Also, there is no clarity on whether the new …

Author

T Surendar

Surendar helps lead the newsroom at The Morning Context as executive editor. Over the years, Surendar has worked in industries from pharmaceuticals to diamonds, as well as a stint as an equity analyst. In his long career as a business journalist, he has led teams at The Times of India, India Today and Fortune India. He was part of the founding team at Forbes India and interned at and published in The Times, London.

Executive Editor

surendar@mailtmc.com

Mumbai