SEBI introduces Accredited Investor process to qualify HNIs for listed startups


Paving a way for investors willing to invest in startups, the regulatory body for the securities market in India, SEBI (Security and Exchange Board of India) has introduced Accredited Investor process for qualifying HNI investors for listed startups.

To be recognised as an accredited investor, an investor, who has a demat account, can apply to the stock exchange or depositories. After ascertaining investor eligibility, the exchange will grant accredition to the investor for three years.

In case, financial status changes, the AI will have to inform stock exchanges and depositories.

Infosys founder Narayan Murthy-led Sebi AIPAC Committee has also offered a suggestion to make it completely digital.

Last year in December, the regulator had approved several measures to make it easier for startups to get listed on the Innovators Growth Platform. It approved the inclusion of Accredited Investors (AI).

For listed startups, any individual with a total annual gross income of Rs 50 lakh and a minimum liquid net worth of Rs 5 crore will be considered as an Accredited Investor. In the case of body corporate, the net worth requirement would be Rs 25 crore.

Meanwhile, for DIPP registered StartUps no income or net worth based limits has been mentioned.

The development has come after stakeholders in the startup ecosystem demanded to make the norms easier.

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