Union Budget 2019: Social stock exchanges could soon take off in India

The Indian markets could soon see the introduction of the so-called social stock exchanges, which enable investors to make impact investing. “It is time to take our capital markets closer to the masses and meet various social welfare objectives related to inclusive growth and financial inclusion,” said Finance Minister Nirmala Sitharaman in the Budget speech. The proposed exchanges will be regulated by Sebi and will allow the listing of social enterprises and voluntary organisations. 

The FM said entities working for the realisation of a social welfare objective will be able to raise equity and debt through an electronic fund raising platform. Globally, there are a few such exchanges, such as Singapore’s Impact Investment Exchange Asia and London’s Social Stock Exchange. These allow firms operating in sectors such as health, environment and transportation to raise risk capital.  

“The social exchange platform is an innovative measure to involve public participation in social causes through the equity route,” says Puneet Maheshwari, director at Upstox. Market experts say Sebi could allow companies with proven track record to access public capital through this platform.