NGOs eye social stock exchanges, but compliance barriers remain
₹10 crore from the SSE of the National Stock Exchange (NSE), with Screwvala calling the process of reaching out to donors the “equivalent of a book-building exercise". In an interaction with Mint, Screwvala said that while the listing process was not simple, the disclosures were necessary to maintain credibility. Wary of the complexity, only about a dozen NGOs have listed and raised money from SSEs so far.
That's a small share of the 64 non-profits that have registered on the SSE of NSE, and 57 on the BSE's SSE since the concept took shape in India in early 2023. Several of these organizations have registered with both exchanges. India’s first SSE listing was in December 2023, when Bengaluru-based SGBS Unnati Foundation raised about ₹1.8 crore.
“Listing on the SSE can become expensive if you aim to raise smaller amounts, and not all NGOs have the expertise to manage it in-house," Vijaylakshmi Saxena, CFO of Mumbai-based Educate Girls foundation said. The foundation raised about ₹1.2 crore this April on the NSE's SSE. It enlisted a consulting firm to navigate the listing process and prepare its offer document, which is akin to a public float's red herring prospectus.
On his part, Screwvala expects an ecosystem to develop around SSEs over time, where professional organizations can help non-profits through the listing process. Social stock exchanges, as the name indicates, are places where NGOs can seek donations from the public to fund their projects. The regulatory disclosures on the SSEs are designed to standardize the scrutiny of those seeking funds, making philanthropy easier.
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