Innovators Growth Platform- A Godsend For Startups In Indian Capital Market.

Innovators Growth Platform- A Godsend For Startups In Indian Capital Market.

Start-ups majorly depend on two things “clients” and “capital”. When we talk about the capital perspective, every entrepreneur aims to get access to low risk capital with no or less additional or acquiring costs and in India the most common funding for start-ups is through VC i.e. Venture capital. But it has its own flaws i.e. venture capitalists are limited liability partners with the option of cashing out funds and limiting their use resting with them limits the scope of free exercise of the start-ups.

Further there is also an additional interest carried on their funds which places an additional burden on the entrepreneurs. With start-ups having limited means of capital their growth has not been that progressive over the last 2 decades however if we compare the same with China and USA where the growth has been 10 fold comparatively only because of the availability of adequate means of capital.

In 2014 the government of India started the initiative of ease of doing business with the aim of curbing the regulatory overhauls so as to initiate and carry forward a said business. SEBI also under the same umbrella has been trying to achieve more efficiency and with respect to start-ups through its notification dated 5th April 2019 where SEBI came up for listing of shares of Start-ups under the name of “Innovators Growth Platform”.

Also Read: Summary Judgements (Commercial Courts Act, 2015)

The framework of Innovators Growth platform (“IGP”) under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR Regulations”)

SEBI in 2019 had created Innovators Growth Platform (IGP) framework under ICDR Regulations to encourage and facilitate capital raising and listing of start-ups and other new-age firms which are intensive in use of technology. The final guidelines for Innovators Growth Platform were released vide the Amended ICDR dated April 05, 2019.

CHAPTER X of the Regulations talks about the Innovators Growth Platform; which tells us about the applicability, eligibility, listing with or without a public issue, and general conditions such as lock in period, trading lot and Withdrawal of approval by the stock exchange.

Regulation 282 of the regulations tell us that the provisions of the Chapter shall be only applicable to issuers seeking listing of their specified securities pursuant to an initial public offer or for only trading on a stock exchange of their specified securities without making a public offer. The provisions of these regulations, in respect of the matters not specifically dealt or excluded under the Chapter, shall apply mutatis mutandis to any listing or trading of specified securities.[1]

It tells us about the eligibility of an issuer; which is intensive in the use of technology, information technology, intellectual property, data analytics, bio-technology or nano-technology to provide products, services or business platforms with substantial value addition shall be eligible for listing on the innovators growth platform, provided that as on the date of filing of draft information document or draft offer document with the Board, as the case may be, twenty five per cent of the pre-issue capital of the Issuer Company for at least a period of two years, should have been held by:

  • Qualified Institutional Buyers;
  • Family trust with net-worth of more than five hundred crore rupees, as per the last audited financial statements;
  • Accredited Investors for the purpose of Innovators Growth Platform;
  • Category III Foreign Portfolio Investor[2]


An issuer seeking listing of its specified securities without making a public offer shall file a draft information document which shall contain disclosures as specified for the draft offer documents in the regulations as specified in Part A of Schedule VI.[3]

On the other hand, if an issuer is seeking to issue and list its specified securities shall file a draft offer document along with necessary documents with the Board in accordance with the regulations along with the fees as specified in Schedule III of the regulations. The Minimum offer size shall be Ten crore Rupees[4]; and the minimum application size shall be two lakh rupees in multiples[5]. The number of allottees in the initial public offer shall at least be fifty[6]. The entire pre-issue capital of the shareholders shall be locked in for a period of six months from the date of allotment.[7]

What Indian start-ups need is steady capital now, these norms also address the roadblocks faced by investors to make exit at the right time.

The Exit of issuers whose securities are trading without making a public offer (mentioned in Regulation 290) says that an issuer whose specified securities are traded on the Innovators Growth Platform without making a public issue may exit from that platform, if: –

  • its shareholders approve such an exit by passing a special resolution through postal ballot where ninety per cent of the total votes and the majority of non-promoter votes have been cast in favour of such proposal; and
  • the recognised stock exchange where its shares are listed approves of such an exit.[8]

Even the recognised stock exchange may delist the specified securities of an issuer listed without making a public issue upon non-compliance of the conditions of listing and No issuer promoted by the promoters and directors of an entity delisted, shall be permitted to list on the platform for a period of five years from the date of such delisting.[9]


The major changes that were brought were the amendments under the ICDR Regulations i.e. Issue of Capital and Disclosure Requirements as earlier the ICDR regulations didn’t allow start-ups to issue IPO i.e. initial public offering in the Indian capital market without fulfilling the regulations which included the average operating profit of at least 150 million rupees in the last 3 last years but under the latter amendment for Accredited Investors for the purpose of Innovators Growth Platform the same was modified to 50 lakhs of annual total gross income cumulatively over the last 3 years.

The regulation also states that once the accreditation is granted by the regulator then the validity is for a period of 3 years which provides a sense of security to the proposed investors.

Earlier the investment proposed under the said platform were to be made at least 10 lakh or in the lots of 10 lakhs but now the same has been reduced to lots of 2 lakh rupees which allows small investors also to pour in their funds under the said offer size which is required to be of at least 10 crore rupees and should have minimum 50 allotees.[10]

And lastly the major relief that has been granted in relation to the Innovators Growth Platform is the guidelines issued in regards to migration from IGP platform to the mainboard, after being listed for a minimum period of 1 year this provision can be availed by the said companies if they have profitability/ net worth track record of 3 years or have 75% of its capital as on the date of application for migration held by Qualified Institutional Buyers in accordance with Regulation 6(1) and 6(2) of the ICDR Regulations for main board listings with minimum of 200 shareholders.


As the current regulation mandates that for start-ups to get listed on the Innovators Growth Platform platform it needs to be operating on profit for the last 3 financial years but in India most of the Start-ups are loss making or some of them act as a holding company of a foreign company which automatically makes these companies ineligible for listing purposes.[11] Further the profit and cash flow level analysis by the Indian Individual and retail investors also hampers the growth of the said platform as comparatively in countries like US the investors are more inclined towards tech oriented business models.

Although SEBI has kept a provision for loss making start-ups to get listed but the major disadvantage in that case happens to be the 75% share that needs to be taken by institutional investors and only 25% is left for the retail investors.

And lastly SEBI also needs to tweak its conservative approach so as to allow investment of foreign funds if not directly then through alternative mechanisms such as SPAC i.e. Special Purpose Acquisition Company.


In 2015, SEBI had introduced a new segment named the Institutional Trading Platform (ITP) to facilitate listing of start-ups. However, the ITP framework failed to generate much interest. It attempted to revive the platform in 2019 by introducing certain changes to the ITP framework, and renamed it the Innovators Growth Platform(IGP).

It is good to see that SEBI is finally giving cognisance to the fact that Innovators Growth Platform is going to be a mainstay for more sophisticated investors and hence a more light-touch regulation would be needed in this regard. Everyone is eager that the Innovators Growth Platform can actually become like the Nasdaq of India.[12]


This is a co-authored article by Mr. Pratyush Mohanty And Nigam Shah, 4th year, LLB (H) student at Amity Law school, Noida




[2] Regulation 283 – Eligibility (Part II)

[3] Regulation 284 – Listing without a public issue

[4] Regulation 285 A – Minimum public shareholding norms and minimum offer size

[5] Regulation 286 – Minimum application size

[6] Regulation 287 – Allocation and allotment

[7] Regulation 288 – Lock in

[8] Regulation 290 – Exit of issuers whose securities are trading without making a public offer

[9] Regulation 291 – Withdrawal of approval by the stock exchange



[12] Innovators Growth Platform

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