The Securities and Exchange Board of India (SEBI) has formed an 18-member working group to review the regulatory framework governing the Innovators Growth Platform (IGP), a dedicated listing route intended to help startups and innovation-led businesses raise money from public markets. The panel will examine whether the existing rules are suitable for companies working in areas such as artificial intelligence, biotechnology, semiconductors, space technology and other research-intensive sectors.
The review comes after the platform struggled to attract meaningful participation despite several regulatory changes since its introduction. SEBI wants to identify the reasons behind its limited use and recommend changes to listing eligibility, fundraising rules, investor participation and post-listing compliance. The objective is to make public-market funding more accessible to young, innovation-led companies while maintaining adequate safeguards for investors.
What Is SEBI’s Innovators Growth Platform?
The Innovators Growth Platform is a dedicated stock exchange platform designed for companies that rely on technology, intellectual property, innovation and research to develop products or services.
It offers an alternative to the traditional main-board listing route, which generally requires companies to meet more established financial and operating criteria.
The platform’s roots go back to 2014, when SEBI introduced the Institutional Trading Platform (ITP) to help new-age businesses access capital markets. The framework was subsequently revamped and renamed the Innovators Growth Platform in 2019, with further changes introduced in 2021 to make it more accessible.
Despite these efforts, the platform has not developed into a widely used fundraising channel for startups.
The IGP is primarily designed for institutional and sophisticated investors rather than ordinary retail participation. Companies can access the platform with or without a public issue, subject to the applicable regulatory requirements. Its relatively high minimum trading lot has also limited its suitability for smaller individual investors.
Why Has the Startup Listing Platform Struggled?
One of the main challenges is that startups and technology companies operate differently from conventional businesses.
A manufacturing company or established service provider may have a track record of revenue, profits and cash flows that can be evaluated using traditional financial measures. A deep-tech or biotechnology startup, however, may spend years developing a product before generating meaningful commercial revenue.
For example, a semiconductor startup may require substantial investment in research, specialised equipment and product validation before it can begin large-scale production. A space technology company may need years of testing and regulatory approvals before its technology becomes commercially viable.
Similarly, biotechnology companies can have long research and development cycles, with substantial spending required before a product reaches the market.
Traditional listing and profitability-related eligibility requirements may therefore be difficult for these businesses to satisfy, even when they have valuable intellectual property or promising technology.
Investor eligibility restrictions, fundraising conditions and post-listing compliance requirements may also make the platform less attractive to companies and investors.
SEBI’s latest review aims to determine whether the existing rules adequately reflect these differences.
What Will the 18-Member SEBI Panel Examine?
The working group will conduct a comprehensive review of the IGP framework under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
Its work will cover several areas:
| Area under review | What SEBI wants to examine |
|---|---|
| Company eligibility | Listing requirements for research-stage, pre-revenue and technology-intensive businesses |
| Investor eligibility | Participation and investment conditions for institutions and other investors |
| Fundraising rules | Public issues, offers for sale, pricing, allocation and minimum subscription requirements |
| Post-listing compliance | Disclosure, corporate governance, trading and continuing obligations |
| Main-board migration | Conditions and procedures for moving from IGP to the main board |
| International comparison | How other markets regulate listings by innovative and growth-stage companies |
The review of investor eligibility is particularly important. A platform designed for emerging companies needs investors who understand the risks associated with early-stage businesses, but restrictions that are too demanding can also reduce the pool of available capital.
SEBI will therefore need to balance broader participation with the need to protect investors from risks associated with unproven business models and uncertain commercial prospects.
Who Is Leading the Working Group?
The panel will be co-chaired by Srini Srinivasan, chairman of the Indian Venture and Alternate Capital Association, and Prashanth Prakash, partner at Accel Partners.
Its membership brings together representatives from the startup, venture capital, private equity and broader business ecosystem.
Other industry participants include P. M. Murali of the Association of Biotechnology Led Enterprises, M. D. Ranganath of Catamaran Ventures, Umakant Soni of Bharat.1AI, Kedar Upadhye of Biocon and Pawan Kumar Chandana of Skyroot Aerospace.
The group also includes representatives from investment firms, including 3one4 Capital, Ideaspring Capital and Kedaara Capital.
Institutional and industry representation includes the Department for Promotion of Industry and Internal Trade (DPIIT), the Institute of Chartered Accountants of India, the Institute of Company Secretaries of India, the Confederation of Indian Industry, the Association of Investment Bankers of India, NSE, BSE and SEBI.
The composition is intended to bring together perspectives from companies seeking funding, investors evaluating new businesses, professional bodies and market institutions.
The working group may also consult startups, industry associations and other stakeholders to understand sector-specific financing requirements. Its recommendations will be submitted to SEBI for consideration. The regulator has not announced a specific deadline for the report.
Why Deep-Tech Startups Need a Different Funding Route
The review comes at a time when India’s startup ecosystem is expanding beyond consumer internet businesses and software services into capital-intensive technology sectors.
Deep-tech companies often require significant funding before their products become commercially successful. Semiconductor design, advanced materials, biotechnology, robotics, artificial intelligence infrastructure and space technology can involve long development timelines and substantial research expenditure.
Venture capital and private equity funding remain important sources of financing for these businesses. However, companies may eventually need access to a broader pool of capital as they expand operations, build manufacturing capacity or commercialise technology.
A more accessible public listing route could offer another funding option.
For investors, it could create opportunities to participate in businesses developing technologies with long-term commercial potential. But these opportunities also involve higher uncertainty, including technology failure, regulatory delays, funding requirements and competition.
A revised IGP framework would therefore need to recognise the different financial profiles of these businesses without weakening disclosure and governance standards.
What Could Change for India’s IPO Market?
If SEBI accepts the panel’s recommendations, the IGP could become a more practical fundraising route for startups that are not yet ready for a conventional main-board listing.
Potential changes could include revised eligibility criteria, more suitable fundraising and allocation rules, and a clearer process for moving to the main board as companies mature.
The review could also help improve institutional participation by reassessing investor eligibility requirements. However, SEBI has not yet announced specific amendments. The panel is examining the framework, and any proposed changes will need regulatory consideration before they become rules.
For India’s startup ecosystem, the outcome could be particularly relevant to companies that have moved beyond early-stage venture funding but still need substantial capital to commercialise their technology.
The Bigger Picture
India has built a large startup ecosystem, but access to capital remains uneven across sectors. Consumer internet and software companies have historically attracted substantial investor attention, while deep-tech businesses often face longer development cycles and greater funding requirements.
A functioning startup listing platform could help bridge this gap by connecting innovation-led companies with public-market investors. It could also give successful startups an alternative to relying entirely on private funding rounds.
However, making the platform easier to access will not automatically make it successful. Companies will still need credible business plans, transparent disclosures and realistic valuations. Investors must also understand that early-stage technology businesses carry substantial risks, including the possibility of commercial failure.
Looking Ahead
SEBI’s working group will examine the existing IGP framework and recommend changes covering company eligibility, investor participation, fundraising, post-listing obligations and migration to the main board. The panel can also consult startups and industry representatives to understand the practical challenges faced by different sectors. Its recommendations will be submitted to the regulator, which will decide whether amendments to the existing rules are necessary.
The outcome could influence how India’s next generation of technology companies access domestic capital markets. If the reforms address the platform’s structural limitations while preserving investor protection, the IGP may become a more meaningful funding option for deep-tech, biotechnology, semiconductor and space startups. For now, however, the review is an early regulatory step rather than an announcement of immediate changes to IPO rules.
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