SGBS Unnati Foundation became the first entity to list on the social stock exchanges (SSE) on 13 December 2023.
Key points
- SUF is a not-for-profit organisation (NPO) incorporated in 2011 that has trained over 45,000 youth. The entity had raised ₹1.8 crore.
- On listing, the Zero Coupon Zero Principal (ZCZP) instruments with a face value of ₹1 each will get credited into the demat accounts of the respective donors.
- This will not be traded but will sit in their accounts. The value of the instrument for the donor will become zero at the end of one year when SUF’s project is completed.
- SSEs were first mooted in the FY20 Budget with the aim of listing social enterprises and voluntary organisations.
- To make the SSE open to wider retail participation, SEBI recently reduced the minimum application size from Rs 2 lakh to Rs 10,000.
- Another major decision has been to reduce the minimum issue size to Rs 50 lakh from the previous Rs 1-crore threshold.
Zero Coupon Zero Principal (ZCZP)
- The Zero Coupon Zero Principal (ZCZP) instrument is neither a bond nor a share.
- The securities cannot be traded and will carry a tenure equal to the duration of a given NGO’s project.
- Currently, the deployment of corporate social responsibility (CSR) funds is not allowed in SSE issues. Donors also cannot claim deduction under Section 80G if they go through this process.
