Foundation, first entity in India to be listed on social stock exchange (SSE)

Foundation launched its Rs 2 crore zero-coupon-zero-principal (ZCZP) bond

Bond proceeds will fund its UNXT program, assisting 10,000 graduating youths

SGBS Unnati Foundation, a Bengaluru-based non-profit organization (NPO), is poised to become the first entity in India to be listed on a social stock exchange (SSE).

On October 30, the foundation launched its Rs 2 crore zero-coupon-zero-principal (ZCZP) bond offering, which will conclude on November 7. SGBS Unnati Foundation plans to list its ZCZP bonds on the SSEs of NSE and BSE on November 30.

A social stock exchange (SSE) aims to raise funds for societal welfare initiatives and efficiently execute them, unlike traditional commercial stock exchanges that primarily seek profit. ZCZPs, which are debt instruments for specific projects, neither yield interest during the bond’s tenure nor repay the principal at the project’s conclusion.

The Unnati Foundation’s bond proceeds will largely fund its UNXT program, assisting 10,000 graduating youths from government colleges in securing employment.

SSE listing is a crucial move towards transparency and accountability, addressing donor skepticism in the NGO sector. Notably, SSEs are not integrated into regular commercial stock exchanges elsewhere globally, as is the case in India.

Under Sebi regulations, NGOs with a three-year operational track record and audited books can register and list their securities on SSEs, focusing on key areas such as poverty eradication, healthcare, education, and more. Sebi also mandates that 67% of an entity’s expenses must be allocated to welfare activities.