India's markets regulator, the Securities and Exchange Board of India (SEBI), has set up a working group to rethink the National Stock Exchange's Innovators Growth Platform (IGP), a listing venue created in 2014 to help startups raise public money. The platform was designed as a stepping stone for younger companies that aren't ready for the main board's stricter requirements, but it has never really taken off.
The working group will review the IGP's rules, including how deep-tech companies—such as those in biotechnology, semiconductors, and space—can use the platform, and how they can eventually move to the main board. This comes as India's startup ecosystem pushes into sectors where firms may spend years in research and development before generating any revenue.
What is the Innovators Growth Platform?
The IGP was launched in 2014 as an alternative listing route for startups and small enterprises. Normally, a company listing on a stock exchange must meet strict eligibility criteria, such as a minimum track record of profitability and a certain amount of net worth. The IGP relaxed some of those requirements, allowing younger, pre-profit companies to list and raise capital from public investors.
The idea was to give startups a way to access public markets without having to go through the full initial public offering (IPO) process on the main board. In theory, this would help them fund growth, reward early employees and investors, and increase their visibility. However, the platform has seen very few listings since its launch, and many startups have instead chosen to stay private or list on other exchanges.
Why is SEBI reviewing it now?
India's startup scene has changed dramatically since 2014. The country now has a thriving ecosystem of deep-tech companies working on cutting-edge technologies like artificial intelligence, biotech, semiconductors, and space exploration. These firms often require large amounts of capital and can take years to turn a profit, making them a poor fit for traditional listing rules.
SEBI's working group will examine whether the IGP's current rules are still suitable for these kinds of companies. One key question is how to allow deep-tech firms to list even if they have no revenue yet, and how to protect investors who take on that higher risk. Another is how to make it easier for companies that list on the IGP to eventually move to the main board as they grow and become more established.
The review is part of a broader effort by Indian regulators to keep pace with the country's rapidly evolving financial markets. India has seen a surge in retail investing in recent years, and regulators are keen to ensure that new investment opportunities are both accessible and safe.
What it means for investors
For everyday investors, the IGP review is a sign that regulators are paying attention to the challenges of investing in early-stage companies. If the platform is revamped, it could open up new opportunities to invest in innovative startups that are currently only available to venture capital and private equity funds.
However, investing in startups is inherently risky. These companies often have no revenue, unproven business models, and a high chance of failure. Even if the IGP becomes more attractive, investors should be prepared for the possibility of losing their entire investment. The working group's recommendations will likely include safeguards to protect retail investors, such as higher disclosure requirements or limits on how much individuals can invest.
The review also comes at a time when Indian markets are near record highs, buoyed by foreign inflows and softer oil prices. As Indian stocks hover near record levels, investors are looking for new ways to participate in the country's growth story. A more functional startup listing platform could provide that, but it will take time for any changes to take effect.
For now, the working group's findings will be closely watched by the startup community, investment bankers, and retail investors alike. The outcome could shape how India's next generation of deep-tech companies access public capital—and whether the IGP finally lives up to its original promise.
