Unnati becomes the first entity to list on the social stock exchange

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Last Updated18/12/2023

Recently, the SGBS Unnati Foundation (SUF) became the first entity to list on the Social Stock Exchange (SSE) marking a new era in impact investing.

SUF, a not-for-profit organization established in 2011, specializes in youth training, having trained over 45,000 individuals.
SUF's listing involves Zero Coupon Zero Principal (ZCZP) instruments with a face value of ₹1 each, credited to donors' demat accounts.
These instruments, non-tradable, signify zero value for donors after one year, coinciding with the completion of SUF's project.

Introduced in the FY20 Budget, SSEs functions as a separate segment within the existing stock exchange.
It helps social enterprises raise funds from the public through its mechanism promoting impact investing and sustainability.
It would serve as a medium for enterprises to seek finance for their social initiatives, acquire visibility and provide increased transparency.
Retail investors can only invest in securities offered by for-profit Social Enterprises(SEs) under the main Board.
In all other cases, only institutional investors and non-institutional investors can invest in securities issued by SEs.

Any social enterprise, Non-Profit Organisation or For-Profit Social Enterprises, that establishes its primacy of social intent can get registered or listed.
As per the SEBI’s regulation, the enterprises must be serving to
- Eradicate either hunger, poverty, malnutrition and inequality
- Promoting education, employability, equality, empowerment of women and LGBTQIA+ communities
- Working towards environmental sustainability
- Protection of national heritage and art or bridging the digital divide etc.

Listing on SSE imposes checks and balances, necessitating disclosure of fundraising purposes and providing a timeline for fund utilisation.
Social audit firms will audit annual impact reports, enhancing transparency and accountability.