8 NPOs raise ₹11 cr via social stock exchange; next one eyes ₹14 cr fundraise (2024)

Listings of non-profit organisations (NPOs)on the NSE’s Social Stock Exchange (SSE) platform has seen encouraging progress with 8 NPOs making debut on the SSE platform since its inception in December 2023. These eight listed NPOs have successfully raised more than ₹11 crore, contributing to areas such as education, healthcare, women empowerment, and environmental sustainability.

Ashishkumar Chauhan, MD & CEO, NSE, expects the SSE platform to gain momentum further in India, saying that the next NPO listing could raise ₹14 crore, more than the combined amount ofthe last eight listings. He said this while speaking at the National Stock Exchange of India (NSE) seminar on ‘Accelerating Social Impact with Social Stock Exchange (SSE)’ at Bharat Mandapam in New Delhi today.

Chauhan mentions that the vision outlined by Finance Minister Nirmala Sitharaman during her budget speech for financial year 2019-20 introducing the concept of Social Stock Exchange.

“Under the guidance of SEBI, NSE has initiated a series of events across India to raise awareness about the Social Stock Exchange. Our main goal is to educate and engage stakeholders, fostering greater collaboration and increasing visibility for this innovative platform,” he says.

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“Following the success of our first event in Bangalore, we are excited to host our second event here today. These seminars hold immense promise for all stakeholders, particularly NPOs. It provides a platform to demonstrate their work, connect with potential donors and impact investors, and gain insights to maximize their social impact,”NSE CEO adds.

As per the NSE, the exchange has taken initiatives such as the e-IPO, capacity-building events, and special pitch sessions to empower NPOs and facilitating their fundraising efforts. The SSE framework, guided by SEBI, offers a structured mechanism for fundraising, transparency, and impact measurement, thereby enhancing trust and efficiency in the social sector, it says.

What is SSE?

FM Nirmala Sitharaman, as part of her Budget speech for FY20, proposed the idea of an electronic fund-raising platform “Social Stock Exchange”, under the regulatory ambit of SEBI for listing social enterprises and voluntary organisations working for the realisation of a social welfare objective so that they can raise capital as equity, debt or as units like a mutual fund. The exchange received final approval from the markets regulator SEBI to set up a SSE as a separate segment on its platform in February 2023.

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The SSE provides social enterprises (NPOs) and for-profit enterprises (FPEs) engaged in eligible activities a unique opportunity to register itself and raise funds on a recognised exchange platform.

The objective of the SSE is to operate as a regulated platform that brings together social enterprises and donors; facilitate funding and growth of social enterprises; and enable mechanism to ensure robust standards of social impact and financial reporting.

Eligibility for listing

As per the norms, any social enterprise, NPOs or FPEs that establishes its primacy of social intent can get listed on SSE segment. As of now, corporate foundations, political or religious organisations or activities, professional or trade associations, and Infrastructure, and housing companies, except affordable housing, are not eligible for listing.

For eligible NPOs, the first step for onboarding starts with the registration on the SSE segment.

Post listing, NPOs can initiate the fund mobilisation process by issuance of instruments such as Zero Coupon Zero Principal (ZCZP) through a public issue or private placement.

Currently the regulations have prescribed the minimum issue size as ₹1 crore and minimum application size for subscription at ₹2 lakh for ZCZP issuance.

For FPE, the process of issue and listing of securities would be same as applicable for issue and listing of securities under the extant processes of the exchange - -- based on eligibility criteria for the main board, SME Platform or innovators growth platform, as applicable in addition to the criteria provided to be eligible as Social Enterprises.

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