Social Stock Exchange (SSE)

15.12.2023

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Why in the news?

Recently SGBS Unnati Foundation has become the first entity to be listed on the Social Stock Exchange (SSE).

Important points:

• Around four more NPOs may be listed by March 2024.
• Currently there are 38 NGOs registered with SSE including Unnati.

About Social Stock Exchange:

• The SSE operates as a separate segment within the current stock exchange and helps social enterprises raise funds.
• SSE was envisioned to create an ecosystem that fosters social innovation, inclusion and impact.
• SSE aims to provide a transparent and credible mechanism for investors to identify, evaluate and support social enterprises that are driving positive change.
• It serves as a medium for enterprises to access finance for their social initiatives, gain visibility and provide greater transparency about funds raised and utilized.
• Under this, retail investors can invest only in securities offered by profitable social enterprises.
  • To make SSEs open to wider retail participation, SEBI has recently reduced the minimum application size from Rs 2 lakh to Rs 10,000.

• In all other cases, only institutional investors and non-institutional investors can invest in securities issued by SEs.

Eligibility:

• Under this, any social enterprise, non-profit organization (NOP) or for-profit social enterprise, which establishes the primacy of social intent, can be registered or listed in the social stock exchange segment.
• As per SEBI regulation, enterprises must serve the following:
  • Eradicate hunger, poverty, malnutrition and inequality; promoting education, employment, equality, women's empowerment and LGBTQIA+ communities; Working towards environmental sustainability.
• Social Stock Exchange will give NGOs wider access to donors across the country.

About SGBS Unnati Foundation:

• SUF is a non-profit organization (NPO) established in 2011 that has trained over 45,000 youth.
• Unnati has become the first NGO to be listed on the Social Stock Exchange of BSE and NSE.
• SGBS Unnati Foundation under the Social Stock Exchange (SSE) has become the first entity to take this route to obtain financing.
• The foundation, which is engaged in vocational training of youth, raised Rs 1.8 crore from four investors.

These include brokerage firm Zerodha and National Bank for Agriculture and Rural Development (NABARD). The funds were used to provide job training to approximately 10,000 graduates of government colleges.