Direct overseas listing a big boost for startups, say experts

Mumbai: The Cabinet on Wednesday approved a proposal to allow direct listing of Indian companies overseas, paving the way for many startups to tap overseas liquidity for their funding needs.

This would require an amendment to Companies Act, 2013, for having enabling provisions that would permit foreign listing of Indian corporates.

Currently, quite a few Indian companies have American Depository Receipts (ADRs) that are traded in the US. Some other corporations have their Global Depository Receipts (GDRs) listed in overseas exchanges.


Here is what experts had to say on the government’s move:

Gaurav Dua, SVP & Head of Capital Market Strategy & investments, Sharekhan
It opens up another opportunity for the companies to raise money. Some of these companies such as startups will get much better valuations in the overseas market. It is indeed a good move.

Ajay Bodke, CEO- PMS, Prabhudas Lilladher
The US and European markets are very deep. It is facilitating Indian companies to tap large pools of capital from some of the most liquid markets in the world such as US or UK. They can tap investors who are reluctant to go through the cumbersome registration process and register as a FII in India. The profile of the company becomes global, and there are comparables in that part of the world for startups.