Global Investors and Indian Startups Press Modi for Overseas Listings

NEW DELHI, Aug 6 (Reuters) – Leading investors including Tiger Global, Sequoia Capital and Lightspeed have called on Indian Prime Minister Narendra Modi to impose rules allowing companies to register overseas for a better access to capital, according to a letter consulted by Reuters.

India in September allowed companies to list directly on foreign exchanges like the New York Stock Exchange or the Nasdaq (NDAQ.O), but the government has yet to announce the necessary rules to govern such listings.

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

“The current inability of unlisted companies to tap international markets to raise capital is (…) an obstacle 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 boost for Indian unicorn startups valued at more than $ 1 billion and the digital unit of conglomerate Reliance, which is considering listing in the United States after raising more than $ 20. billion dollars from investors last year.

But the letter comes as many choose to enroll in India.

Chinese food delivery company Zomato, backed by the Ant Group, recently made a remarkable debut on Indian stock exchanges, valuing the company at $ 13 billion, while others including SoftBank-backed rideshare company Ola , are also considering local listings.

“Even though some companies are preparing to list in India, many more are keen to assess the option of international listing,” the letter said, highlighting how companies in other markets like the United States have market capitalization. much larger than in India. .

The London Stock Exchange, which is closely following India’s policy change, told Reuters last year it was in talks with several Indian tech companies on overseas listings. Such listings will provide an opportunity for some of the world’s leading stock exchanges to compete for fast growing Indian start-ups.

The Indian government was concerned, however, that listing overseas would mean that companies seeking higher valuations with access to a larger group of investors would choose to only list overseas, thus hurting prospects. Indian markets.

The group of investors and startups told Modi that these concerns were “unfounded” and that overseas listings would increase foreign investor interest in Indian startups.

Reporting by Aditya Kalra in New Delhi and Abhirup Roy in Mumbai; Editing by Mike Harrison

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