Listing Process of ZCZP

Listing Process of ZCZP on the Social Stock Exchange (SSE)

Zero Coupon Zero Principal instrument is among the innovative securities that have been introduced by the SSE framework of SEBI in India. ZCZP is a not-for-profit organization (NPO) issued and listed on the SSE segment of the NSE and BSE. The structure of ZCZP makes it different from normal IPOs because it does not pay interest (coupon) or repay principal. This is why it can be used as a pure donation instrument with increased transparency and regulatory control.

Key Steps in the Listing Process

The process that all Not-for-profit organizations (NPOs) intending to list their Zero Coupon Zero Principal (ZCZPs) on the SSE segment must follow is as given below:

1. Execution of Listing Agreement:

The NPO should provide a duly signed listing agreement together with its listing application for the ZCZPs on the recognized exchange (NSE or BSE).

2. Dematerialization of ZCZPs:

The ZCZPs should be dematerialized as per the Depositories Act, 1996 and should be admitted to at least one of the depositories (NSDL or CDSL).

3. Appointment of Registrar to the Issue:

The NPO must appoint a SEBI-registered Registrar to the Issue to manage allotment and investor servicing.

4. Appointment of Advisors/Consultants (Optional):

Although the appointment of advisors or consultants is not compulsory, in case they are hired, their information should be provided in the fundraising document.

5. Draft Fundraising Document Filing:

The NPO must submit a draft fundraising document to the SSE in which it is registered, together with the relevant fees. This draft is valid within six months of filing.

6. Public Comment Period:

The SSE will post the draft fundraising document on its site at least 21 days to allow comments by the public.

7. Clarifications from NPO (If Required):

The SSE can request further information or clarification of the NPO at this time.

8. Review and Observations by SSE:

The SSE will give its official comments on the draft document within 30 days from the date of filing the draft or receipt of clarifications, whichever is earlier.

9. Final Fundraising Document and Offer Period:

The NPO should include the observations of SSE and submit the final fundraising document. The public issue of ZCZPs should be open for at least 3 working days and not exceed 10 working days.

10. Issue Pricing:

ZCZPs will be issued at face value as indicated in the fundraising document.

11. Private Placement (if applicable):

The same procedural framework shall be followed, to the extent applicable, for private placement of ZCZPs.

12. Minimum Issue and Application Size:

The ZCZP issue should be at least 1 crore.
The minimum amount of each application should be 2 lakh.
Investors must be institutional and non-institutional (retail investors are not allowed).

13. Minimum Subscription Requirement:

The issue should be subscribed to by at least 75% of the total issue size to be successful.

14.Listing Timeline:

The ZCZPs should be listed on the SSE segment of the exchange within T+10 trading days, where T is the date of closure of the issue.

15. Non-Tradability on Secondary Market:

NPOs do not offer ZCZPs that can be traded in the secondary market. However, they can be transferred to legal heirs in exceptional cases.

NSE SSE Listing Checklist for Instruments

To list ZCZPIs on the NSE Social Stock Exchange segment, the issuer must ensure compliance with the following:

Eligibility Requirements

Must be a registered NPO (as per Regulation 292A of SEBI ICDR).
Should be engaged in eligible social activities (e.g., education, health, poverty alleviation).
Minimum operational history of 3 years.
Valid registration under:

Section 12A/12AA/12AB and 80G of the Income Tax Act.

Minimum fund flow thresholds

Documents Checklist

Registration certificates and constitutional documents (Trust Deed/MoA/AoA).
PAN and registration with the NGO Darpan.
Financial statements and fund flow for the last 3 years.
SSE Registration Agreement and self-declaration.
Auditor certification confirming financial and tax eligibility.

Post-Issue Listing Compliance

Maintain a separate bank account for unutilized ZCZPI funds.
Quarterly disclosure of fund usage.
Annual impact reporting by social auditors.

BSE SSE Listing Checklist for Instruments

The BSE Social Stock Exchange (BSE-SSE) requires similar but specifically tailored documentation and procedures.

BSE SSE Listing Pre-requisites

Legal form as a trust, society, or Section 8 company.
Active operations in socially beneficial sectors.
Valid registrations under 12A and 80G.
Three years of operational and financial history.
Registration on NGO Darpan portal.

Required Documents for Listing of ZCZP Is

SSE Registration application form.
Copy of registration certificates under relevant laws.
Certified governing documents (Trust Deed, By-laws, MoA).
PAN card copy.
Income Tax registration (12A and 80G).
Audited financials and fund flow statements for the past 3 years.
Auditor’s certificate on financial eligibility.
Social Audit Report (where applicable).

Additional BSE Requirements

Clarity on the end-use of funds.
Clear impact metrics and methodology.
KYC of trustees/directors.
Details of past fundraising and donor base.

Documents to Be Provided by Issuer for Basis of Allotment of ZCZP

The ZCZPIs shall be allotted in a fair, transparent and SEBI-compliant manner. The NPO shall submit the following documents to determine the basis of allotment:

1. Final Fundraising Document

Incorporating SSE comments.
Publicly disclosed on SSE and the issuer’s website.

2. Board/Governing Body Resolution

Authorizing the size of the issue, the price and the methodology of allotment.

3. Application Forms and Bids

List of applications received.
Verification of eligibility of investors (non-retail only).
Minimum application size: ₹2 lakhs per investor.

4. Subscription Report

Subscription levels (must meet 75% minimum).
Category-wise break-up (institutional, non-institutional).

5. Allotment Finalization Certificate

List of allottees with amounts authenticated.
Oversubscription handling mechanism, if applicable.

6. Escrow Account Details and Fund Receipt Report

Confirmation of funds received in the designated account.

7. Statement of Compliance

Compliance with SEBI ICDR, LODR and SSE guidelines.

Documents to Be Provided for Listing of ZCZP Is

After the successful allocation of the issue, the listing of ZCZPIs entails the submission of a final package of documents to the SSE and the exchange of the listing approval and activation.

1. Final Allotment Document

Adding a list of allottees and allotment quantum
Signed by an authorized signatory of the NPO.

2. ISIN Activation Confirmation

Issued by depositories (NSDL/CDSL) for the ZCZPIs.
Ensures dematerialization.

3. Listing Application Form

Standard format as prescribed by NSE/BSE.

4. Trustee/Director Declaration

Confirming the non-trading nature of ZCZPIs
Making sure that the transfer is only done in certain allowed situations (e.g., to legal heirs).

5. Declaration of Fund Utilization

Plan for deploying funds raised through ZCZPIs.
Statement on the separation of funds as per LODR norms.

6. Registration Certificate and PAN

Certified true copies for record verification.

7. Audited Financial Statements

Most recent available, ideally post-allotment (provisional allowed if recent).

8. SSE Listing Agreement

Signed agreement acknowledging compliance with the continuous disclosure and compliance framework.

9. Social Impact Framework Document

Methodology for tracking outcomes.
Identification of key indicators and impact measurement tools.

10. Registrar and Transfer Agent (RTA) Agreement

Optional but recommended for operational ease.

Post-Listing Requirements

Quarterly Fund Utilization Statement.
Annual Impact Assessment Report within 90 days of the FY end.
Material event disclosures within 7 days of occurrence.

If you are a registered NGO, Society, or Trust working in the fields of health and education, you can raise funds up to ₹10–20 crore through the Social Stock Exchange. For more details, contact IndiaIPO.