Investing Social Stock Exchange ZCZP SEBI NSE BSE Zerodha

Social Stock Exchange on Zerodha

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The Social Stock Exchange (SSE) is a separate segment of the recognised stock exchanges, the National Stock Exchange and the Bombay Stock Exchange , created by SEBI to let social enterprises raise funds from the public, with not-for-profit organisations raising money through a Zero Coupon Zero Principal (ZCZP) instrument that pays no interest and returns no principal. SEBI built the framework by amending the SEBI (ICDR) Regulations 2018 , the LODR Regulations and the AIF Regulations on 25 July 2022. This article sets out what the SSE is, what a ZCZP instrument does, who can list and who can invest, the minimum application after two rounds of SEBI reductions, and whether a retail Zerodha user can take part through Kite .

The SSE is not a separate exchange building. It is a segment that sits inside NSE and BSE, using their listing and reporting machinery to bring disclosure and standardised impact reporting to fundraising that would otherwise happen through opaque private donation. A donor who contributes to a ZCZP issue on the SSE gets a recorded, reported instrument rather than a receipt, and the issuing organisation accepts the reporting obligations that listing imposes. The financial return is zero by design; the point of the instrument is verified social impact, not yield.

The SEBI framework and its dates

The SSE moved from idea to live segment over three years. The concept was first proposed in the 2019-20 Union Budget. SEBI’s board approved the framework in September 2021. SEBI then notified the enabling amendments to the ICDR, LODR and AIF Regulations on 25 July 2022, and issued the detailed operating framework through circular SEBI/HO/CFD/PoD-1/P/CIR/2022/120 on 19 September 2022. NSE and BSE received approval to launch their SSE segments over 2022 and 2023, and the first ZCZP listings followed, including issues by social organisations on the NSE SSE segment through 2023 and 2024.

ZCZP was made a “security” so that it could be issued and reported through the exchange mechanism, bringing the instrument within the Securities Contracts (Regulation) Act framework. That recognition is what lets a donation be structured as a listed instrument with disclosure rather than a private transfer.

The Zero Coupon Zero Principal instrument

A ZCZP instrument is the SSE’s distinctive product. It pays no coupon, no interest accrues over its life, and it returns no principal at maturity. A contributor who puts Rs 10,000 into a ZCZP issue does not get the Rs 10,000 back and does not earn a return on it. The instrument records the contribution, ties it to a specific not-for-profit organisation and a stated social project, and obliges the organisation to report on the use of funds and the impact achieved. In substance it is a donation routed through the exchange, with the transparency and reporting that listing brings.

Two features follow from that design. First, a ZCZP cannot be traded in the secondary market; it is transferable only for limited purposes such as passing to a legal heir, so a contributor cannot sell it to exit for cash. Second, there is no securities transaction tax on it, and the contribution may qualify for a deduction under Section 80G of the Income Tax Act 1961, like other eligible donations. The holding shows in a demat account as a ZCZP, distinct from any tradable security.

Minimum issue size and minimum application

SEBI has cut the SSE thresholds twice to widen participation, and the current numbers are well below where the framework started.

The minimum issue size, the smallest amount a not-for-profit organisation can raise in a single ZCZP issue, was Rs 1 crore at the 19 September 2022 framework. SEBI reduced it to Rs 50 lakh. The minimum subscription required to keep an issue is 50 per cent of the target.

The minimum application size, the smallest amount a contributor can put in, started at Rs 2 lakh in 2022, which limited ZCZP to institutional and larger non-institutional investors. SEBI reduced it to Rs 10,000 through its December 2023 framework action (circular SEBI/HO/CFD/PoD-1/P/CIR/2023/196 dated 28 December 2023), and then to Rs 1,000 through circular SEBI/HO/CFD/PoD-1/P/CIR/2025/33 dated 19 March 2025, acting on the recommendations of the SSE Advisory Committee. The Rs 1,000 floor is the operative minimum now, and the explicit purpose of the cut was to bring retail contributors into ZCZP fundraising.

Who can list

Two kinds of social enterprise can use the SSE, and they raise funds differently.

A not-for-profit organisation (NPO) registers on the SSE and raises funds through a ZCZP instrument, through a social-impact fund structured as an alternative investment fund, or through donations. The NPO must establish the primacy of social intent, demonstrated through one of the eligible activities set out in the SSE chapter of the ICDR Regulations under Regulation 292E, a list covering areas such as eradicating hunger and poverty, promoting education and healthcare, gender equality and environmental sustainability.

A for-profit social enterprise (FPE) raises funds through the usual instruments, listing equity on the main board , the SME platform or the innovators growth platform, or issuing debt, alongside the obligation to report on its social impact. An FPE is a business with a social mission, not a charity, and it is held to the disclosure standards of its listing route plus the SSE impact reporting.

Who can invest, and the retail question

The investor eligibility on the SSE has shifted as SEBI lowered the minimum application. The NSE SSE rules state that retail investors may invest in securities offered by for-profit social enterprises listed on the main board, while for other cases, including ZCZP instruments issued by NPOs, the rules historically permitted only institutional and non-institutional investors, with a retail individual investor defined as one applying for securities worth up to Rs 2 lakh.

That restriction predates the retail-opening push. SEBI’s stated reason for cutting the ZCZP minimum application to Rs 1,000 in March 2025 was to bring retail contributors into ZCZP fundraising, and the on-platform reality now matches that intent: Zerodha walks a retail Kite user through applying for a ZCZP issue using a UPI block from Rs 1,000. The practical position in 2026 is that retail contributors can and do apply for ZCZP issues; an investor relying on the older institutional-only language should confirm the current NSE SSE rules for the specific issue before applying.

Applying through Zerodha

Zerodha exposes SSE ZCZP issues directly in the Kite Bids window, the same area that carries equity IPOs. The flow is short: log in to Kite, open Bids, select the SSE issue, choose the Give back option, and enter the contribution amount and the UPI ID. The applicable range on Kite is Rs 1,000 to Rs 5 lakh, with the UPI block covering individual applications up to Rs 5 lakh, and the exact range depending on the specific issue. The contribution shows in holdings as a ZCZP instrument, with no returns and no principal repayment, and it cannot be traded in the secondary market. It may qualify for a Section 80G deduction.

The mechanics resemble an IPO application, a UPI mandate blocks the amount, but the substance is a donation. There is no allotment in the investment sense, no listing gain, and no exit through the market. Read how to apply for an IPO on Kite web for the comparable IPO flow, and bear in mind that a ZCZP contribution does not behave like an IPO share once it is in the demat.

How the SSE differs from a regular IPO

A regular IPO sells an ownership or debt claim that trades on the exchange and can be sold for a profit or a loss; a ZCZP issue on the SSE accepts a donation that returns nothing and cannot be sold at all. The two share the application machinery, the Kite Bids window and the UPI block, but they are different instruments with different purposes. An equity IPO investor is buying a stake; a ZCZP contributor is funding a social project and receiving a reported, tax-deductible record of the contribution. For the equity route, read IPO process in India and how to apply for an IPO via Zerodha .

See also

External references

References

  1. SEBI notification dated 25 July 2022 amending the ICDR, LODR and AIF Regulations to create the Social Stock Exchange framework.
  2. SEBI circular SEBI/HO/CFD/PoD-1/P/CIR/2022/120 dated 19 September 2022 (operating framework for the Social Stock Exchange).
  3. SEBI circular SEBI/HO/CFD/PoD-1/P/CIR/2023/196 dated 28 December 2023 (flexibility in the SSE framework; reduction of minimum issue size to Rs 50 lakh and minimum application to Rs 10,000).
  4. SEBI circular SEBI/HO/CFD/PoD-1/P/CIR/2025/33 dated 19 March 2025 (reduction of the minimum ZCZP application to Rs 1,000).
  5. SEBI (ICDR) Regulations 2018, Regulation 292E (eligible activities establishing primacy of social intent).
  6. Zerodha support, Social Stock Exchange and ZCZP application on Kite (Bids, Give back, Rs 1,000 to Rs 5 lakh through UPI; as of 21 June 2026).

WebNotes Editorial Team prepares factual reference material based on publicly available regulatory documents and broker disclosures. WebNotes is not affiliated with Zerodha Broking Limited. A ZCZP contribution gives no financial return and cannot be traded; verify current SSE rules and Section 80G eligibility before contributing.

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Frequently asked questions

What is the Social Stock Exchange?
The Social Stock Exchange is a separate segment of the existing stock exchanges, NSE and BSE, that lets social enterprises raise funds from the public. SEBI created it by amending the ICDR, LODR and AIF Regulations on 25 July 2022.
What is a Zero Coupon Zero Principal instrument?
A ZCZP is an instrument issued by a not-for-profit organisation on the SSE that pays no interest and returns no principal at maturity. It is effectively a donation routed through the exchange with disclosure and impact reporting. It cannot be traded in the secondary market.
What is the minimum application for a ZCZP on the SSE?
Rs 1,000, reduced from Rs 10,000 by SEBI circular SEBI/HO/CFD/PoD-1/P/CIR/2025/33 dated 19 March 2025. The minimum issue size a not-for-profit organisation must raise is Rs 50 lakh, reduced from Rs 1 crore.
Can retail Zerodha users invest in the Social Stock Exchange?
Yes. Zerodha exposes SSE ZCZP issues in the Kite Bids window. A retail user contributes from Rs 1,000 to Rs 5 lakh through a UPI block, and the holding appears as a ZCZP instrument with no returns and no principal repayment.
Who can list on the Social Stock Exchange?
Not-for-profit organisations, which register on the SSE and raise funds through ZCZP, social-impact funds or donations, and for-profit social enterprises, which raise equity or debt. Both must establish the primacy of social intent through SEBI’s list of eligible activities.
Does a ZCZP give any return or tax benefit?
A ZCZP gives no financial return and no principal repayment; the return is social impact. There is no securities transaction tax on it, and the contribution may qualify for a deduction under Section 80G of the Income Tax Act, like other eligible donations.
Can a ZCZP be sold or transferred?
No, a ZCZP cannot be traded in the secondary market. It is transferable only for limited purposes, such as to a legal heir. A contributor holds it as a record of the donation, not as a tradable security that can be exited for cash.

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