Social stock exchange (SSE) saw its first listing on Wednesday, with SGBS Unnati Foundation becoming the first entity to take this route to avail financing.<\/p>\n
The foundation — engaged in vocational training of youth — raised Rs 1.8 crore from four investors.<\/p>\n
These include brokerage firm Zerodha and National Bank for Agriculture and Rural Development (Nabard).<\/p>\n
The funds will be utilised for job training to around 10,000 graduates from government colleges.<\/p>\n
The issue was open between October 30 and November 22.<\/p>\n
Coined as a game-changer for social enterprises to raise funds, the SSE — facilitated by both BSE and the National Stock Exchange (NSE) — enables investors to subscribe to zero-coupon, zero-principal (ZCZP) bonds of non-profit organisations (NPOs).<\/p>\n
The ZCZP is backed by robust standards of social impact and financial reporting.<\/p>\n
“We hope that this will change the social fabric of the country. We have a point to prove because every major country, whether it is the US, UK, Canada or Singapore, have attempted this in various formats and failed.<\/p>\n
“In the social stock exchange, we hope that we will be the real ‘jagatguru’,” said R Balasubramaniam, chairman, social stock exchange advisory committee of the Securities and Exchange Board of India (Sebi).<\/p>\n
Exchange officials said that three-four more NPOs may get listed by March 2024.<\/p>\n
According to the NSE website, there are 38 NGOs registered with the SSE, including Unnati.<\/p>\n
“SSE was envisaged to create an ecosystem that fosters social innovation, inclusion, and impact.<\/p>\n
An SSE aims to provide a transparent and credible mechanism for investors to identify, evaluate and support social ventures that are creating positive change,” said Ashwani Bhatia, whole-time member, Sebi.<\/p>\n
To make the SSE open to wider retail participation, Sebi recently reduced the minimum application size from Rs 2 lakh to Rs 10,000.<\/p>\n
Another major decision has been to reduce the minimum issue size to Rs 50 lakh from the previous Rs 1-crore threshold.<\/p>\n
This will enable NPOs to raise lower amounts through the SSE route. Notifications are still awaited for these changes.<\/p>\n
Acting on the feedback received from stakeholders, the market regulator had also eased compliance with the change in nomenclature of ‘social auditor’ to ‘social impact assessor’.<\/p>\n
While focusing on outcome-based investing, Ajit Kesari, additional chief secretary, Government of Madhya Pradesh’s department of finance, said state governments could help take projects of social enterprises to a much larger scale.<\/p>\n
“The moment Sebi came up with its guidelines in 2022, we kept aside Rs 100 crore in the next Budget (March 2023) for the social impact bonds,” he added.<\/p>\n