When an Indian NPO wants to raise money on the Social Stock Exchange (SSE), the funding happens through a Zero Coupon Zero Principal (ZCZP) issue, and the document that makes it possible is the Fundraising Document, or FRD. This explainer walks through what the FRD is, the disclosure areas SEBI expects it to cover, and how a ZCZP issue moves step by step from a draft document to a listed instrument.
For background on the instrument itself, see our explainer on how ZCZP works, and the broader SSE funding overview.
What is the Fundraising Document (FRD)?
The Fundraising Document (FRD) is the detailed proposal an NPO files with the exchange when it wants to raise funds through a ZCZP issue. It is the SSE equivalent of an offer document: it sets out who the organisation is, what project the money is for, how much is being raised, how the funds will be used, and what social outcomes the project is expected to deliver. As a rule, there is one FRD per project, so an NPO running two distinct projects would file two separate documents.
The FRD exists in two stages. First the NPO files a draft fund raising document, which is placed in the public domain for comments and reviewed by the exchange. After feedback is addressed, the NPO files a final fund raising document, which is the version the issue is actually launched on.
What the FRD must contain
SEBI expects the FRD to cover a defined set of disclosure areas so that a prospective donor can assess the NPO and the project. The table below summarises the main areas and what each typically includes.
Disclosure area | What it typically covers |
|---|---|
Vision | The NPO's mission and activities, aligned to the objects in its MOA and AOA (or trust deed). |
Target segment | The population or community the project serves. |
Strategy | How the NPO plans to deliver the project and reach the target segment. |
Governance | The governing body and its composition, and the cadence of board meetings. |
Management | Key staff and their roles in running the organisation and the project. |
Operations | Physical presence and registered address, and where activities are carried out. |
Finance | Audited financial statements for the past three financial years, prepared in line with ICAI guidance. |
Compliance | Audited accounts without material qualifications, and income-tax compliance. |
Credibility | Trust deed or MOA and AOA, PAN, registrations under 12A / 12AA / 12AB and 80G, FCRA where applicable, and remuneration details. |
Social impact | Theory of change, an impact scorecard, and evidence of past impact. |
Risks | Risks to the project, their mitigation, and any unintended consequences. |
How a ZCZP issue works, step by step
A ZCZP issue follows a defined sequence. The exact steps and timelines can change, so treat the following as the general flow and confirm the current process with NSE or BSE.
Confirm eligibility and register on the SSE (the SSE segment of NSE or BSE). You can sanity-check fit using our SSE readiness check, and read the registration steps.
Define the project and the issue size.
Appoint a Registrar to the Issue (a SEBI-registered RTA) and arrange dematerialisation through a Depository and Depository Participant, since ZCZP instruments are issued only in dematerialised form.
File the draft FRD with the exchange.
The draft FRD is open for public comments for 21 days, during which the exchange may also issue queries.
Incorporate the feedback and queries, then file the final FRD.
Receive in-principle approval from the exchange, which is valid for six months.
Open an escrow account with an Escrow Collection Bank to receive subscription money.
Run the public issue. The NPO sets the issue period within the permitted window of 3 to 10 trading days and discloses it in the FRD, with a minimum application size of ₹1,000 (reduced from ₹10,000 with effect from 19 March 2025).
Reach the minimum subscription threshold (a successful raise is not guaranteed).
Carry out allotment of the ZCZP instruments to subscribers.
List the instrument, typically around T+10, that is within about ten trading days of the issue closing.
Use the funds for the project and report utilisation and impact as required.
Key norms for a ZCZP issue
Norm | Current position |
|---|---|
Minimum issue size | ₹50 lakh. |
Minimum application size | ₹1,000 per applicant (reduced from ₹10,000 with effect from 19 March 2025). |
Public issue window | The NPO sets the issue period within the permitted window of 3 to 10 trading days and discloses it in the FRD (3 trading days is the minimum and 10 trading days the maximum). |
Minimum subscription | The minimum subscription is 75% of the issue size. The SEBI circular dated 15 April 2026 introduced a reduced floor of 50% for qualifying issuances, subject to the Social Stock Exchange's due diligence before in-principle approval; it is not automatic. Confirm the current threshold. |
In-principle approval validity | Six months. |
Form of instrument | Dematerialised form only. |
If undersubscribed | If the minimum subscription is not met, the amount collected is refunded to applicants. |
Projects per FRD | One project per FRD. |
Registration with the SSE is currently valid for up to three years, per the SEBI circular dated 15 April 2026. The exchanges also charge a nominal registration fee; confirm the current fees with NSE or BSE, as fee figures change.
Who is involved in a ZCZP issue
Several intermediaries support a ZCZP issue, and an NPO will usually engage some of them well before filing the draft FRD.
Registrar to the Issue (a SEBI-registered RTA), who manages applications, allotment, and refunds.
Depository and Depository Participant, for issuing the instruments in dematerialised form.
Escrow Collection Bank, which holds the subscription money during the issue.
Statutory Auditor, for the audited financial statements disclosed in the FRD.
Social Auditor or Social Impact Assessor, for the impact assessment after listing.
Compliance Officer, who oversees disclosure and ongoing obligations.
A Company Secretary is advisable to coordinate governance and filings.
After listing: reporting obligations
Once the ZCZP instrument is listed, the NPO takes on ongoing disclosure obligations under SEBI's LODR Regulations.
General annual disclosures under LODR Reg 91C, to be made within 60 days of the end of the financial year.
The Annual Impact Report under LODR Reg 91E, to be made within 90 days of the end of the financial year, assessed by a Social Auditor.
Corporate funders sometimes route CSR money into ZCZP instruments; we cover that route in our explainer on CSR and the SSE. For hands-on support with running an issue, see our raising funds service.
Frequently asked questions
What is an FRD?
The Fundraising Document (FRD) is the detailed project proposal an NPO files with the Social Stock Exchange to raise funds through a ZCZP issue. It is filed first as a draft and then, after public comments and exchange queries, as a final document.
How long does a ZCZP public issue stay open?
The NPO sets the issue period within the permitted window of 3 to 10 trading days and discloses it in the FRD; 3 trading days is the regulatory minimum and 10 trading days the maximum. Separately, the draft FRD is open for public comments for 21 days before the final FRD is filed.
What happens if the issue is undersubscribed?
If the minimum subscription is not met, the amount collected is refunded to applicants. The minimum subscription is 75% of the issue size; the SEBI circular dated 15 April 2026 introduced a reduced floor of 50% for qualifying issuances, subject to the Social Stock Exchange's due diligence before in-principle approval, so it is not automatic. Confirm the current threshold.
Do I need one FRD per project?
Yes. The standard position is one FRD per project, so an NPO running multiple distinct projects files a separate FRD for each.
This article is a general explainer, not legal or financial advice. The consolidated framework is the SEBI SSE Master Circular dated 19 January 2026, as updated by later circulars including the one dated 15 April 2026. Rules, timelines, and fees change, so confirm the current SEBI and exchange position before acting.