IAS Gyan

Daily News Analysis


16th December, 2023 Economy


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Picture Courtesy: www.sakshi.com 

Context: Unnati Foundation, a not-for-profit organization (NPO) dedicated to empowering underprivileged youth through skill training and employment placement, has made history as the first entity to list on the National Stock Exchange's Social Stock Exchange (SSE) in India.

Impact on Unnati Foundation (SUF)

Fundraising for Social Impact

  • Through the issuance of Zero Coupon Zero Principal (ZCZP) instruments, SUF raised ₹1.8 crore. This funding will be directed toward training 10,000 underprivileged youths across states, aiming to facilitate their employment.
  • This method of fundraising bypasses traditional grants and donations, presenting a sustainable and scalable approach to financing social initiatives.

Enhanced Credibility and Transparency

  • Listing on the SSE provides SUF with a platform to showcase financial and social accountability.
  • Transparency in fund utilization and reporting builds trust among potential donors and investors, potentially attracting more substantial and longer-term funding.

Impact Measurement and Reporting

  • SSE's requirement for annual impact reports, audited by social audit firms, ensures that SUF's social impact is measured and documented.
  • This data-driven approach allows stakeholders to track the effectiveness of their contributions, holding SUF accountable for its social mission.

Social Stock Exchange (SSE)

  • The Social Stock Exchange (SSE) is a specialized platform within a larger stock exchange that allows social enterprises and non-profit organizations (NPOs) to raise capital through the issuance of Zero Coupon Zero Principal (ZCZP) instruments.
    • Unlike traditional stock exchanges where companies issue shares or debt to raise capital, ZCZPs are non-tradable instruments with a face value of ₹1 each.
    • Donors receive these ZCZPs in their demat accounts as a symbolic representation of their contribution to the NPO's social cause.
  • NPOs that meet the SSE's eligibility criteria can list their ZCZP offerings on the platform. Investors can then purchase these ZCZPs through their demat accounts.
  • The funds raised are used by the NPO to implement its social projects. At the end of the project period, the ZCZPs expire and hold no monetary value. However, donors have the satisfaction of knowing that their contribution has helped make a positive social impact.

Benefits of the SSE for NPOs

  • Access to capital: The SSE provides NPOs with a new and innovative way to raise capital, which can be difficult for them through traditional means.
  • Enhanced credibility and transparency: Listing on the SSE requires NPOs to meet certain disclosure and reporting standards, which can help to build trust with investors and the public.
  • Increased visibility and reach: The SSE platform helps to raise awareness of NPOs and their work, which can lead to increased donations and support.
  • Improved impact measurement and reporting: The SSE framework encourages NPOs to track and measure their social impact, which can help them improve their programs and demonstrate their effectiveness to donors.

Benefits of the SSE for investors

  • Invest in social impact: The SSE allows investors to invest in causes they care about and make a positive social impact.
  • Diversification: ZCZPs can be a good way to diversify an investment portfolio.
  • Tax benefits: In some cases, donations made through the SSE may be eligible for tax deductions.

Challenges of the SSE

  • Limited awareness: The SSE is still a relatively new concept, and many investors and NPOs are not yet aware of it.
  • Liquidity: ZCZPs are not tradable, which means that investors cannot easily sell them before they expire.
  • Standardization: There is a need for more standardized reporting and impact measurement frameworks for NPOs listed on the SSE.


  • Unnati's listing on the NSE SSE signals a promising trajectory for a more robust social impact investing ecosystem in India. By addressing challenges and leveraging opportunities, this model has the potential to drive significant social change and empower NPOs to fulfil their missions effectively. Continued support, education, and regulatory refinement will be crucial in nurturing and expanding this burgeoning landscape of impact investing.

Must Read Articles:

Social Stock Exchange:  https://www.iasgyan.in/daily-current-affairs/social-stock-exchange#:~:text=An%20SSE%20allows%20the%20listing,listed%20on%20BSE%20or%20NSE.


Q. What distinguishes a Social Stock Exchange from a conventional stock exchange?

A) It focuses solely on tech startups.

B) It doesn't require regulatory compliance.

C) It prioritizes financial returns over social impact.

D) It emphasizes investments with a clear social mission.

Answer: D


Unlike traditional stock exchanges that primarily focus on financial returns, a Social Stock Exchange prioritizes investments in entities committed to social, environmental, or community impact. It aims to align investor funds with social causes while seeking financial returns.