India's Modi should allow companies to list overseas for better access to capital

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India's Modi should allow companies to list overseas for better access to capital

NEW DELHI – Leading investors including Tiger Global, Sequoia Capital and Lightspeed have asked India's Prime Minister Narendra Modi to give companies the ability to list overseas for better access to capital according to a statement seen by Reuters.

In September the government allowed companies to list directly on international exchanges https: Reut.rs 376 I 7 cW like the New York Stock Exchange or Nasdaq, but has yet to announce any rules required to govern such listings.

Some 22 investors and top Indian startups like food delivery app Swiggy and online tutoring firm Byju's wrote to Modi urging him to expedite the policy.

The current inability of Indian companies to tap international markets for raising capital is an impediment to the growth ambitions of unlisted startups, they said in the July 29 letter.

Sequoia declined to comment. Other entities, as well as Modi's office, did not respond immediately to requests for comment.

The new policy is seen as a shot in the arm for Indian startups valued at more than $1 billion and the digital unit of the conglomerate Reliance, which is eyeing a listing after raising more than $20 billion from investors last year.

But the letter comes when many choose to list in India.

China's Indian food delivery firm Ola had a stellar debut https: www.reuters.com Technology ant-backed - Zomato-jumps - 53 - above-offer - price of India-market-debut - 2021 - 07 - 23 on Indian bourses recently, valued the firm at $13 billion, while others including SoftBank-backed services provider Ola are also eyeing local listings.

Even when some companies are gearing up to list in India, many others are keen to evaluate the possibility of an international listing, the letter said, highlighting how companies in other markets like the United States have a much bigger market capitalization than in India.

The London Stock Exchange, which is tracking India's policy change closely, told Reuters in the last year https: www.reuters.com article india-stocks - listing - idINKBN 26 U 1 BZ it had been in talks with several overseas tech firms on global listings. Such listings will present an opportunity for some of the world's leading exchanges to compete for India's rapidly growing startups.

The Indian government however had said that overseas listing could mean that companies hunting for higher valuations would choose to only list abroad, hurting prospects of Indian markets.

The group of investors and startups told Modi such concerns were unfounded, and that offshore listing will increase interest of foreign investors in Indian startups.