Global investors, Indian startups press Modi for overseas listings

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India’s Prime Minister Narendra Modi addresses a gathering before flagging off the “Dandi March”, or Salt March, to celebrate the 75th anniversary of India’s Independence, in Ahmedabad, India, March 12, 2021. REUTERS/Amit Dave/File Photo

NEW DELHI (Reuters) – Leading investors including Tiger Global, Sequoia Capital and Lightspeed have called on India’s Prime Minister Narendra Modi to spur rules to allow companies to list overseas for better access to capital, according to a letter seen by Reuters.

India in September allowed companies to list directly on foreign exchanges https://reut.rs/376I7cW like the New York Stock Exchange or Nasdaq, but the government has yet to announce rules required to govern such listings.

Calling it an “unfinished reform agenda”, some 22 investors and top Indian startups such as food-delivery app Swiggy and online tutoring firm Byju’s wrote to Modi urging him to expedite the policy.

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

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

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

But the letter comes when many are choosing to list in India.

China’s Ant Group-backed Indian food delivery firm Zomato had a stellar debut https://www.reuters.com/technology/ant-backed-zomato-jumps-53-above-offer-price-india-market-debut-2021-07-23 on Indian bourses recently, valuing the firm at $13 billion, while others including SoftBank-backed ride-hailing firm Ola are also eyeing 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 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 last year https://www.reuters.com/article/india-stocks-lse-listing-idINKBN26U1BZ it had been in talks with several Indian tech firms on overseas listings. Such listings will present an opportunity for some of the world’s leading exchanges to vie for India’s rapidly growing startup companies.

The Indian government however had been concerned that overseas listing could mean that companies hunting for higher valuations through access to a wider group of investors 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 overseas listings will increase interest of foreign investors in Indian startups.

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