In a press release today, the exchange said NSE had received approval from the capital markets regulator to launch its Social Stock Exchange.

In December last year, the Securities and Exchange Board of India (Sebi) granted in-principle approval to the National Stock Exchange (NSE) to set up the exchange.

The idea of ​​a social stock exchange was first brought up in the 2019-20 Union Budget to give socially engaged entities such as charitable trusts and non-profit organisations (NPOs) access to capital markets for funding.

Non-profit organisations and even for-profit social enterprises (FPE) must register with exchanges and mobilise funds through instruments such as zero-coupon zero-principal (ZCZP) through public offerings or private placements.

“For eligible non-profit organisations, registering with the social stock exchange is the first step. After registration, non-profit organisations can initiate the fund mobilisation through instruments such as a zero-coupon zero-principal (ZCZP) public offering or private placement,” NSE said.

“To raise awareness, we have been holding various events and holding hands with social enterprises and are currently in various stages of exchange onboarding,” it said.

The minimum issue size is now Rs 1 crore, and the minimum application size for subscription is Rs 2 lakh. Subscribing to such issues will be considered charity.

The idea of ​​a social stock exchange has become popular during the pandemic as social businesses have a growing need for funding at a reasonable cost.

A working group formed by Sebi provided the framework for the Social Stock Exchange. To be eligible to list on the exchange, companies must engage in 16 broad areas of social activity defined by the working group.

Corporate foundations, trade associations, political and religious organisations, and infrastructure companies are not eligible to list on the Social Stock Exchange.