Social Stock Exchange (SSE) is a separate segment of existing stock exchanges that helps social enterprises raise funds from the public through stock exchange mechanisms.
Contributing via the SSE works somewhat like participating in an IPO, but with one key difference: there is no selling or trading of the SSE instruments. Instead, you can choose an SSE listing, make your contribution, and the funds will be directed toward the specific social impact initiatives of the chosen enterprise.
How much can you contribute?
On Kite, you can contribute anywhere between ₹1,000 and ₹5,00,000, depending on the specific SSE IPO. Your contribution will then appear in your holdings as a ZCZP (Zero-Coupon Zero-Principal) instrument.
What are Zero Coupon Zero Principal (ZCZP) Instruments?
ZCZP instruments are unique to SSE and work differently from traditional investments. When you invest in ZCZP instruments, you're essentially making a grant to support specific social projects.
Key features:
- No returns or principal repayment (hence "zero coupon zero principal")
- Cannot be traded in the secondary market
- Available only in dematerialised form
What can you expect as an SSE supporter?
Transparency and reporting:
All registered social enterprises must provide detailed reports covering:
- The social problem they solve
- Their target beneficiaries
- Their approach and impact metrics
- Financial details and governing body information
- 80-G income tax deduction for your contribution
Investment treatment:
- Your investments in ZCZP instruments are treated as grants for accounting purposes
- Standard securities regulations apply to for-profit social enterprise investments