The Social Stock Exchange seeks to bridge the gap between social purpose and capital markets. Examine its design and evaluate why uptake has been modest since 2022.

The Union Budget 2019-20 proposed a Social Stock Exchange (SSE) under SEBI [1]. It lets non-profits and social enterprises raise money in exchange for public reports on their social impact [2]. The design is sound, but very little money has flowed through it so far.

Design of the SSE

• A segment, not a new exchange: the SSE runs as a separate segment of NSE and BSE, regulated by SEBI. It grew out of the 2020 SEBI Working Group report [2][3].
• Zero Coupon Zero Principal (ZCZP) instrument: it was notified as a security under the Securities Contracts (Regulation) Act in 2022, and its issue is governed by the ICDR Regulations. Investors get no interest and no principal back. Their return is purely social [3][4].
• Entry filters: the original rules set a minimum issue size of ₹1 crore, a minimum application of ₹2 lakh and minimum subscription of 75% [3].
• Accountability and ecosystem support: issuers must report on social impact. A ₹100-crore Capacity Building Fund is housed under NABARD [4], and ZCZP subscription counts as CSR spending under Schedule VII of the Companies Act, 2013 [5].

Why uptake has been modest

• Very small volumes: only 5 non-profits raised ₹21.9 crore in 2025-26, and 6 issues raised ₹14.8 crore in 2024-25 [6].
• Registration has not turned into fund-raising: 25 non-profits had registered on NSE-SSE and 24 on BSE-SSE by October 2023 [4], but few have actually raised money.
• Weak demand: donors who expect no money back have little reason to use a market platform. SEBI has kept lowering the bar, cutting the minimum application to ₹1,000 [7] and halving the minimum issue size to ₹50 lakh [8].
• Compliance burden: audits and impact reporting cost more than many small grassroots non-profits can easily bear.
• Public money with a new label: NSDC's first ZCZP issue in 2026 had a single subscriber, NABARD, for ₹4 crore [9]. Retail and CSR money is still largely untested.

The SSE builds disclosure and outcome reporting into social funding, but it has not yet found enough donors. SEBI should publish data on who subscribes (retail, CSR or public bodies), steer CSR funds through the SSE and certify impact assessors. That would let the SSE grow into a channel for financing SDG 17 partnerships and inclusive development.