Originally published: April 10, 2008
Source: EDA Rural Systems
EDA Rural Systems, an Indian development sector consultancy firm, has launched CapitalConnect, an online equity exchange for social investments. The platform for equity placements will cater to social enterprises and MFIs, and will be open to institutional investors. CapitalConnect will enable MFIs and enterprises to register themselves to access financiers who will buy and sell shares on the exchange.
The platform will require an initial capital of INR1 billion (US$25 million) before it can evolve into a full-fledged stock exchange. That may take another three years, said Sanjay Sinha the founder of EDA. He said that the added advantage of the exchange is that it offers investors an exit route. The moment the investor wants to withdraw from the enterprise, the stocks can be sold to other buyers found through the portal.
Sinha said the exchange would not come under the purview of the Securities and Exchange Board of India (SEBI) because it will cater only to institutions and not retail investors. "Once it is a stock exchange we would require Sebi clearance. At the moment it is a platform for equity placements only," he explained.
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Related news:
M-CRIL Plans Equity Exchange for Social Investments (Business Standard, 7 April 2008)
