- Sunday, November 24, 2024
By: Shubham Ghosh
LEADING American investor firms like Tiger Global, Sequoia Capital and Lightspeed have urged Indian prime minister Narendra Modi to incentivise companies to list overseas for better access to capital, Reuters reported citing a letter sent on July 29.
Last September, India allowed firms to list directly on foreign exchanges, such as the New York Stock Exchange, but the government is yet to announce rules needed to govern such listings.
Describing it as an “unfinished reform agenda”, some 22 investors and top Indian start-ups like food-delivery app Swiggy and online tutoring company BYJU’S wrote to Modi requesting him to expedite the policy.
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“The current inability of unlisted companies to tap international markets for raising capital is … an impediment to the growth ambitions of Indian start-ups,” they said in the letter.
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When Reuters approached the investment firms, start-ups and the prime minister’s office, it did not receive any reaction immediately.
The new policy is seen as a shot in the arm for Indian unicorn start-ups valued at over $1 billion and the digital unit of conglomerate Reliance, which is targeting a US listing after raising over $20 billion last year from investors.
But the letter to Modi came when many are choosing to list in India.
China’s Ant Group-backed Indian food delivery firm Zomato saw an impressive debut on Indian bourses recently, valuing the firm at $13 billion. Others like SoftBank-backed ride-hailing firm Ola are also aiming for local listings.
“Even as some companies are gearing up to list in India, many others are keen to evaluate the option of an international listing,” the letter said, highlighting how companies in other markets like the US have a much bigger market capitalization compared to that in India.
The London Stock Exchange, which is tracking India’s policy change closely, told Reuters last year that it had been in talks with many Indian tech firms on overseas listings.
Such listings are expected to bring an opportunity for some of the world’s leading exchanges to vie for India’s fast-growing start-up companies.
The Indian government had been concerned that overseas listing could see companies looking for higher valuations through access to a wider group of investors would only choose to list abroad, affecting prospects of Indian markets.
But the investors and start-ups told the government that such concerns were “unfounded” and foreign listings will see overseas investors becoming more interested in India’s domestic start-ups.
