Startup founders and VCs urges PM Modi for direct overseas listing of Indian companies

The heads of 22 top startup founders and venture capital firms have written to Prime Minister Narendra Modi, in order to achieve the allowance of direct overseas listing of Indian companies by the government.

According to a joint group, this allowance will let the startups be on the global map, making it the most significant move in the history of Indian startups.

The decision was made after a half-dozen Indian startups filed draught prospectuses to go public. The listing of food delivery app Zomato last month has set the stage for other startups to accelerate their IPO plans.

The letter had been sent earlier this week, with copies addressed to Finance Minister Nirmala Sitharaman, Commerce Minister Piyush Goyal, and Information Technology Minister Ashwini Vaishnaw.

Kunal Shah of Cred, Byju Raveendran of Byju's, Sriharsha Majety of Swiggy, Rajan Anandan, managing director and partner at Sequoia Capital India, Scott Shleifer, partner at Tiger Global Management, and Prashanth Prakash, partner at Accel are among those who have signed the letter.

Gaurav Munjal of Unacademy; Amit Jain of CarDekho; Abhiraj Singh Bhal of Urban Company (formerly Urbanclap); Jaydeep Barman of Rebel Foods; Amrit Acharya of Zetwerk; Asish Mohapatra of OfBusiness; Souvik Sengupta of Infra Market, and Ashneer Grover of BharatPe, are the other signatories.

In addition, Navroz D Udwadia, cofounder and partner at Falcon Edge Capital, and Ravi Adusumalli, founder and managing partner of Elevation Capital (formerly SAIF Partners) have also been a part of this move.

The letter stated that startups need access to international capital to level the playing field with foreign technology giants and be globally competitive. It said the total market capitalization of all the companies listed in India is about $3 trillion, while the comparable number for the United States is $50 trillion.

It will also help to raise the profile of Indian startups, allowing them to compete with startups from other countries on a global scale. Furthermore, it highlighted the issue of The current inability of unlisted companies to tap international markets for raising capital is a barrier to growth, and most Indian startups do not compete on a level playing field with their foreign counterparts.

Previously, by amending the Companies Act, 2013, the government indicated its intention to allow direct overseas listing of Indian companies in September 2020.

Indian companies listed overseas were also exempted from several obligations applicable to domestically listed companies in February of this year.

This will encourage foreign investors to increase and speed up their investments in Indian startups as they become more familiar with investing in local companies listed on foreign stock exchanges.

It will provide a broad framework for valuing other technology companies. There is also greater specialization among investors, which allows them to place a higher valuation on these companies.

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