Narayana Murthy heads SEBI panel on regulatory framework for startups

As it prepares a new regulatory framework for startups and alternative investments, regulator SEBI has set up an 18-member panel headed by IT czar N R Narayana Murthy to advise on policy matters in this regard.

The Alternative Investment Policy Advisory Committee (AIPAC) includes representatives from the industry, private equity firms and start-up organisations, besides senior officials of Sebi, RBI and the Finance Ministry.

As per its Terms of Reference, the panel would give its recommendations to SEBI (Securities and Exchange Board of India) on issues related to the further development of the alternative investment and startup ecosystem in India.

According to PTI, it would also "advise SEBI on any hurdles that might hinder the development of the alternative investment industry under its purview". Besides, the Committee would give inputs on "any issues which need to be taken up with other regulators for development of the alternative investment industry", along with on other matters of relevance alternative investment industry and development of the startup ecosystem.

Infosys has been among the first major technology companies in India to tap the capital markets to raise funds.

While Infosys co-founder Narayana Murthy has been appointed Chairperson, its other members include Sanjay Nayar (Indian Private Equity and Venture Capital Association Chairman and KKR India CEO), Saurabh Srivastava (Indian Angel Network), Ajay Piramal (Piramal Group), Devinjit Singh (Carlyle Group) and Manish Chokhani (TPG Growth India).

Other members include Gautam Mehra (PwC India), Akshay Mansukhani (Malabar Investments), Mani Iyer (Incube Ventures), Abid Hassan (Startup Village Fund), K E C Rajakumar (Ascent Capital Advisors), Sudhir Sethi (IDG Ventures India and iSPIRT Foundation), Sunil Godhwani (Religare Enterprises) and Gopal Srinivasan (TVS Capital Funds).

SEBI's Executive Director Ananta Barua and its General Manager Barnali Mukherjee would also be part of the panel, along with RBI's Executive Director N S Vishwanathan and Finance Ministry Deputy Secretary Nikhil Varma.

To help startups tap the capital markets to raise funds, SEBI is already in the process to finalise norms for listing of such companies, although small investors might not be allowed to invest for at least a year.

The norms, which are likely to issued later this month or early next month, will help startup companies raise funds from within India and stop their flight to overseas markets. For want of a price discovery within the country, many of these companies plan to get listed in Singapore or the US.

The final guidelines would be put in place after taking into account public suggestions. In Late March, Sebi had floated a discussion paper and had sought public comments the same till April 20.

SEBI in its discussion paper, had proposed an 'Alternate Capital Raising Platform', wherein startups and firms can raise money from institutions and HNIs from the capital markets under a relaxed regulatory regime.

The new platform for raising money within the country will be initially made applicable to companies which are in the area of software product development, e-commerce, new-age companies having innovative business model.

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