Beyond IPOs and FPOs, Ashish Kacholia, Zerodha invest in NPO which gives zero return
IPOs hitting Dalal Street in the last few days of December, star investor Ashish Kacholia and broking firm Zerodha have quietly invested in an NPO which got listed on the Social Stock Exchange this week.
NPO stands for not-for-profit organisation and investors can't expect anything in return for buying zero coupon zero principal (ZCZP) instruments.
Unlike investments in IPOs, FPOs and NFOs, you don't get any interest, capital appreciation, dividend or even your capital back. The instrument, however, does get credited to demat accounts of investors but its value will become zero after the project for which the fundraiser was done gets completed.
On Wednesday, Bengaluru-based NPO SGBS Unnati Foundation, which runs vocational training programs for unemployed, raised Rs 1.8 crore from two HNIs and another two institutional investors.
Smallcap czar Kacholia, known for his multibagger picks, invested Rs 30 lakh while Zerodha generously invested Rs 1 crore.
Other two investors are NABARD and HNI Govind Vaidiram Iyer.
«Unlike companies, we do not have merchant bankers to help us raise funds. A platform like SSE will eventually help us reach out to newer investors because it adds to the credibility of the fundraising exercise,» Ramesh Swamy of Unnati told ETMarkets.
What is social stock exchange?
Social Stock Exchange (SSE) is a separate segment in BSE and NSE to help NPOs raise funds for projects that have a positive social impact.
After registering with SSE, NPOs can issue zero coupon zero principal instruments through private placement or public issuance.
