Bengaluru-based SGBS Unnati Foundation (SUF), a non-profit organization, is looking to raise ₹2 crore from high-net-worth individuals (HNIs) by becoming the first non-governmental organization (NGO) to list on India’s Social Stock Exchange (SSE). The NGO plans to issue zero coupon bonds to attract investments from foundations and HNIs who are inclined toward social impact causes.
“The HNI community has expressed a desire for this listing to occur in India. There are individuals who want the Social Stock Exchange to succeed,” stated Ramesh Swamy, Director of SUF. The NGO’s offering opened on Monday and will be available for seven days, with an expected listing date of November 20.
SUF conducts training programs for youth between the ages of 18 and 25 who are either underprivileged or lack the necessary skills for employment. This listing comes at a time when India Inc. is increasing its focus on Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG) activities.
Swamy explained that zero-coupon bonds would be attractive to investors willing to fund NGOs that are listed, audited, compliant with requirements, and have a demonstrable social impact. He noted, “The credibility of many NGOs is questionable, primarily on various accounts, including governance.”
A zero-coupon bond is a debt security that does not make periodic interest payments but is instead sold at a deep discount to its face value. Investors profit from such bonds when they mature and are redeemed for their full face value.
“The issue size is set at ₹2 crore, and we hope to raise at least 75%, or ₹1.5 crore, which is our minimum target,” Swamy stated.
The SSE segment on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) serves as a platform for social enterprises, including non-profit organizations (NPOs) and for-profit enterprises (FPEs). Swamy disclosed that he had studied the listing of NGOs in some European countries and Brazil. He also mentioned that other NGOs are interested in listing on the SSE.
The SUF’s advisors for this endeavor included the law firm Trilegal and investment bank Unitus, while Bigshare Services served as the registrar and transfer agent. The NGO collaborates with over 400 volunteers.
This initiative by SUF highlights the growing interest in social impact investment and the development of platforms that facilitate investments in organizations committed to social welfare and sustainable development. The listing on the Social Stock Exchange offers a new channel for NGOs and social enterprises to attract funding and support their missions.