Government to Boost Startups as It Eliminates Rules Which Mandate Dual Listings
This week, the government is reportedly formulating rules to not mandate secondary listing in India for domestic firms that choose to list in overseas stock exchanges. The move will allow companies to directly float overseas without first getting listed at the Indian stock exchange, as a way to help startups access capital more easily in the aftermath of the Covid-19 pandemic.
There was skepticism if dual listings would be compulsory for the domestic companies. The confusion was cleared away when a government official confirmed that there would be no requirement for mandatory Indian listing.
Unicorns like Snapdeal, Reliance, and Sequoia Capital India applauded the step saying the move allows domestic companies to become global champions. The companies further said that secondary listing provision risked splitting trading volumes, hurting long-term valuations, and raising compliance needs and costs.
The departure from the existing regime will help Indian companies improve visibility and create brand awareness. The new listing condition will support businesses in raising brand valuation by fostering multiple listings internationally and expanding overseas.