IPO for Startups
IPO for Startups by Bombay Stock Exchange (BSE) A startup ecosystem is slowly but steadily emerging in India. Startup contributes a major share in employment and forex generation. India is emerging as a startup the supporting country. SME IPO Listing, where more than 300 Companies are listed after successfully collecting more than 1800 Crores from the market. Currently, the market value of these companies is more than Rs. 15000 Cr. Now SEBI has approved IPOs for Startups as well. Historically, Startups were dependent upon loans, Venture capital funds, etc. Now with Startup IPOs, such companies have got an additional source of fundraising. Startup IPOs are easy, cost-effective and less time-consuming. A lot of concessions have been given to Startup for Listing. Criteria for New Listing Incorporation The Company shall be incorporated under the Companies Act, 1956 / 2013. The “Start-up companies” seeking Listing on BSE StartUp Platform should be in the sector of IT, ITES, Bio-technology and Life Science, 3D Printing, Space technology, E-Commerce, Hi-Tech Defense, Drones, Nano Technologies, Artificial Intelligence, Big data, Enhance/Virtual Reality, E-gaming, Exoskeleton, Robotics, Holographic Technology, Genetic Engineering, Variable Computers Inside body computer technology and other Hi-tech based companies. Financials The company should be registered as a start-up with MSME/DIPP. In case the company is not registered as a Start-up with MSME/DIPP then the company’s paid-up capital should be minimum Rs. 1 crore. Post Issue Paid-up Capital The post issue paid up capital of the company (face value) shall not be more than Rs. 25 crores. There should be preferably investment by QIB investors (as defined under SEBI ICDR Regulations, 2009) / Angel Investors/Accredited Investors for a minimum period of 2 years at the time of filing of draft prospectus with BSE. Networth Positive Networth. Track Record The company should be in existence for a minimum period of 2 years on the date of filing the draft prospectus with BSE. Other Requirements It is mandatory for a company to have a website. It is mandatory for the company to facilitate trading in Demat securities and enter into an agreement with both the depositories. There should not be any change in the promoters of the company in preceding one year from date of filing the application to BSE for listing under StartUp segment. Disclosures A certificate from the Applicant Company / Promoting companies stating the following The Company has not been referred to National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code, 2016 There is no winding-up petition against the company that has been accepted by the National Company Law Tribunal (NCLT). None of the Promoter / Directors of the company has been debarred by any regulatory agency(ies). Migration from BSE Startups Platform to the Main Board The companies seeking migration to Main Board of BSE should satisfy the eligibility criteria It is mandatory for the company to be listed and traded on the BSE Startup Platform for a minimum period of two years and then they can migrate to the Main Board as per the guidelines specified by SEBI vide their circular dated 18th May 2010 and as per the procedures laid down in the ICDR guidelines Chapter IX.
Brand Valuation Services
What is Brand Valuation? A brand, regardless of the organization and its nature of the business, is associated with several different elements such as the consumer’s trust, the consumer’s relationship with the organization, and the identity that the company has built over the years. If one searches the internet, a brand could be defined in several different ways, some of which would include all of these said elements in it. But what exactly is a brand valuation, and how is it defined? Brand valuation, in simple words, could be defined as the process used to determine or calculate the value of a particular brand, or the money that someone would be paying for the brand, or determining the financial value of the brand. Brand valuation gained popularity and importance in the 1980s, when food companies were on an acquisition spree, and which gave rise to the need for valuation and assessment of brands. What are the Benefits of Brand Valuation? The most obvious of all the benefits of brand valuation is that the business owners understand the market and financial value of the brand. However, there are some other benefits associated with brand valuation. Let us take a look at a few of them. Different Methods of Brand Valuation Brands could be valued through different methods based on its earnings, premium profits, and through the relief from royalty method. Let us glance through each of these methods. Premium Profit: This method involves the assumption that a branded product would sell more than an unbranded one. It is the difference in price between the branded and the unbranded product. It is this difference that is called the premium. When you multiply the premium with the annual sales forecast of the product, it gives you a cumulative amount, which is referred to as the annual price premium, and the sum of which, in turn, is the known the value of the brand. By CA Anandkumar Gawade Registered Valuer for Securities and Financial Assets.
Startup Valuation: How to Value a Startup?
Startup valuation is important from the viewpoint of raising money for the business. While valuing the already settled businesses isn’t as difficult, valuing a startup could be one. This is because the company is just a startup with no past record, performance history, reviews, etc. The company is yet to gain ground in the market, and therefore, determining whether your startup is worth 1 million INR, or it isn’t, could be difficult. Often, you’ve got to go by what the investors say. Nonetheless, it is necessary that you work out an amount, so that you tag some value to your startup, and investors tag it to their investments. This article discusses some ways of valuing a startup, thereby simplifying life for the startup owners as well as investors. Determining the Worth of your Business in the Market You don’t necessarily have to go by what your investors say, or how much they value your company. But, if you don’t agree to what they say, you’ll have to put forth a sensible calculation that would help you value the worth of your business in the market. So, how do you do it? Work out Financial Projections: Startups don’t have a past. They live in the present and work for the future. Hence, it is imperative that you make some sensible and realistic projections to support the worth you’ve derived to. Remember, it is difficult. However, with your own research about the future of your business, coupled up with financial advice from valuation experts, you’d be able to come to a more logical figure. When it comes to profit projections, often, investors look for investing in businesses with quick profits. So, it is necessary that you determine the number of years required to turn your business into a profitable venture. Also, find out the market value of profitable startups in the same business. That would help you to determine the future value of your own business. Again, research is the key, and you must know your business very well, along with the market it is destined for in the next 2-3 or 5 years or so. Make Comparisons: You may not wish to compare your business with anyone else’s, but here it is required. Find out the worth of your peers in the same business. That would help you derive a better figure as well. Seek some consultation from lawyers and accountants, as they’d help you calculate the market rate of your peers in the market. Tangible and Intangible Assets: Working out tangible assets is quite simple. But, dealing with the intangible assets of a startup could be quite difficult. The simple reason here is that you can’t measure them and startups haven’t really reached those levels yet. Intangible assets could include various factors such as goodwill, copyrights, intellectual property, brand value, etc. Nevertheless, startup values in the market would help you determine the value with all the assets put all together. By Anandkumar Gawade Registered Valuer for Securities and Financial Assets.
IBC: Supreme Court Permits Anytime Withdrawal Of Insolvency Proceedings
The recent Supreme Court ruling in Brilliant Alloys’ insolvency may just prove to be the saving grace for promoters who have lost control of their insolvent company and whose hopes of ever regaining it were dismal. The ruling now allows promoters, eligible or not, to take back control of their insolvent companies by enabling withdrawal of the admitted insolvency application at any point during the insolvency process. The apex court has clarified that the National Company Law Tribunal can allow for withdrawal of … Get More Information – Click Here
Exercise of ‘put option’ a ‘financial debt’ under IBC?
The NCLAT recently dismissed the appeal filed by erstwhile MCX Promoter Jignesh Shah (and others) challenging the NCLT order initiating insolvency proceedings against La-Fin Financial Services (Corporate Debtor). The Appellate Tribunal ruled that a put-option, or buy-back arrangement, will constitute a ‘financial debt’. The NCLT had initiated Corporate Insolvency Resolution Process (CIRP) against La-Fin in August, 2018, based on a Section 7 application filed by IL&FS Financial Services. IL&FS held approximately 5% equity in MCX, which upon mutual negotiations, was decided to be sold. It was further agreed that a part of the proceeds obtained by IL&FS from the sale of these shares would be used to purchase 2.46% equity in MCX-SX. This arrangement was recorded in a Share Purchase Agreement (SPA) between the three parties. There was a simultaneous agreement, in the form of a Letter of Undertaking (LoU) between IL&FS as well as La-Fin Financial Services according to which, La-Fin would purchase IL&FS’s equity in MCX-SX within 3 years of the investment date. The LoU stipulated the price at which the transaction would be carried out. A Scheme of Reduction for MCX-SX was proposed in order to comply with the SEBI (MIMPS) Regulations, which was prejudicial to the interest of IL&FS. However, negotiations between IL&FS and MCX-SX reaffirmed that the commitments under SPA and LoU would be honoured. Once the Scheme of Reduction was sanctioned by the Bombay High Court, Financial Technologies India Limited (FTIL) informed IL&FS that La-Fin’s obligation under the LoU had become infructuous (for want of compliance with MIMPS Regulations). This is where the dispute stems from. At the appeal stage, however, in addition to challenging the debt altogether, the Appellants also challenged the order on many technical grounds. Firstly, the order was heard by two members of the Mumbai Bench, however was signed by only member and subsequently, by an addendum-cum-corrigendum the other member agreed and consented to the admission order. The NCLAT found that Section 420(2) of the Companies Act, 2013 read along with the NCLT Rules allows the NCLT to make such modifications. The court rejected all challenges, except to clarify that the related entities should have been connected with the business of the promoter to be barred from bidding. Defaulters who repay the debt within a year of them being classified as non-performing assets (NPAs) can submit resolution plans for assets as can promoters if they clear debt with interest. Get More Information – Click Here
Supreme Court upholds Bankruptcy Code, rejects promoters’ challenges
NEW DELHI: The Supreme Court upheld the Insolvency and Bankruptcy Code (IBC), backing the government’s efforts to deal with the bad-debt burden of banks and rejecting challenges by the promoters of defaulting companies barred by the law from regaining control of their firms. The court said the IBC was working and had led to rising credit flows. “We are happy to note that in the working of the code, the flow of financial resource to the commercial sector in India has increased exponentially as a result of financial debts being repaid,” said the bench comprising justices RF Nariman and Navin Sinha. The top court commended the IBC for bolstering the recovery of bad debt, saying a “defaulters’ paradise” had been ended. Several provisions, such as preferential treatment to financial creditors over operational ones (suppliers of goods) had been questioned by the petitioners. Impact on Big Insolvency Cases They had also disputed the broad sweep of Section 29A, which barred not just promoters but any individual or entity “related” to them from seeking to take over the ailing entity. Among the promoters contesting the IBC was Sanjay Singal of Bhushan Power and Steel, represented by senior advocate Mukul Rohatgi and lawyer Mahesh Agarwal. The court rejected all challenges, except to clarify that the related entities should have been connected with the business of the promoter to be barred from bidding. Defaulters who repay the debt within a year of them being classified as non-performing assets (NPAs) can submit resolution plans for assets as can promoters if they clear debt with interest. Get More Information – Click Here
Prabhat Dairy to sell flagship dairy biz to French firm
The company has entered into definitive agreements with Tirumala Milk Products, a wholly-owned subsidiary of Lactalis, for the Rs 1,700-crore sale, said the statement. Prabhat Dairy on Monday said it will be selling its flagship dairy business for Rs 1,700 crore to French multinational Groupe Lactalis. In an official statement released here, Prabhat said it will be sharing a “substantial proportion” of the sale proceeds with its shareholders and will focus on the cattle feed business after the close of the transaction. The company has entered into definitive agreements with Tirumala Milk Products, a wholly-owned subsidiary of Lactalis, for the Rs 1,700-crore sale, said the statement. “The association with Lactalis one of worlds largest dairy players – will offer this business a strong platform for accelerated growth momentum in becoming one of the largest private dairy businesses in India,” Vivek Nirmal, Joint Managing Director, Prabhat Dairy, was quoted as saying in the statement. He said in the last 20 years, Prabhat built world-class integrated milk and dairy products company, with strong supply partnership with over 1,00,000 farmers and two state-of-the-art manufacturing facilities. The acquisition is subject to regulatory approvals, including the nod from the Competition Commission of India, the statement said. Promoters Sarangdhar Ramchandra Nirmal, Vivek Nirmal, and Nidhi Nirmal will continue to be associated with the business for the next two years, the statement said.