10 NGOs raised ₹22 crore on SSE by December 2024: Finance Ministry

Over 10 NGOs having been listed on the Social Stock Exchanges (SSE) of the BSE and NSE have cumulatively raised a total of ₹22 crore until December last year, the Finance ministry revealed today.

“Under the regulatory ambit of SEBI, enabling provisions for setting up of Social Stock Exchange #SSE as a separate segment of the existing stock exchange is put in place,” FinMin said in a post on X.

The post revealed that as of December last year, in addition to the funds raised by NGOs, over 120 non-profit organisations (NPOs) had registered with NSE and BSE. The funds have been directed toward critical sectors such as health, water and sanitation, skill development, and education.

The journey so far: Origins and progress of social stock exchanges

In her Budget speech for FY20, Finance Minister Nirmala Sitharaman introduced the idea of an SSE under the regulatory framework of SEBI. The proposed platform aimed to enable social enterprises and voluntary organisations working towards social welfare objectives to raise funds through equity, debt, or mutual funds-like units.

SSE received the final approval from SEBI in February 2023 to function as a separate segment within the existing market platforms, enabling capital mobilisation for entities promoting inclusive growth and financial inclusion. Later that year, the regulatory framework was revised to ease fund-raising thresholds, encouraging greater participation from both non-profit organisations (NPOs) and donors.

In April 2024, Section 80G exemption (donations) was extended to contributions made via Zero Coupon Zero Principal (ZCZP) instruments on the SSE, to increase retail participation. Additionally, an online Application Supported by Blocked Amount (ASBA) mechanism was introduced, enabling seamless subscriptions to ZCZPs through demat-linked bank accounts, simplifying the donation process on the SSE platform.

All not-for-profit organisations (NPOs) are required to register on the SSE, comply with minimal annual reporting requirements, and can list instruments such as Zero Coupon Zero Principal (ZCZP), mutual funds, and development impact bonds to raise funds. For-profit enterprises (FPEs), on the other hand, are not mandated to register on the SSE but, can list equity shares on the main board, SME platform, or Innovators Growth Platform (IGP), as well as debt securities.

For NPOs listed on the SSE, particularly on the NSE, at least 67% of the average revenue and expenditure over the past three years must be generated from activities directly benefiting members of the target population.

On the NSE SSE, 73 NPOs have registered, while over 45 NPOs have registered on the BSE SSE.