Government News

Nasscom wants government to let overseas Indian startups list directly

By - 31 Jan 2024 08:35 PM

India-focused startups incorporated overseas should be able to list on the domestic stock exchanges within the existing externalised structures, Indian industry body National Association of Software and Service Companies (Nasscom) has suggested as part of its Union Budget 2024-25 recommendations.Out of 139 startups who participated in a survey conducted by Nasscom, approximately 16.5% of Indian-origin startups have externalised legal structures and would consider raising equity capital through public listing in India if the regulations are amended to allow for a direct listing, it said.Out of 139 startups who participated in a survey conducted by Nasscom, approximately 16.5% of Indian-origin startups have externalised legal structures and would consider raising equity capital through public listing in India if the regulations are amended to allow for a direct listing, it said.India-focused startups incorporated overseas should be able to list on the domestic stock exchanges within the existing externalised structures, Indian industry body National Association of Software and Service Companies (Nasscom) has suggested as part of its Union Budget 2024-25 recommendations.

Previously, the industry body had reached out to the markets regulator Securities and Exchange Board of India (Sebi) and the finance ministry seeking a viable framework for such listing. This is the first time it has been part of the Budget suggestions, said Ashish Aggarwal, head of public policy, Nasscom.Existing rules permit only domestically incorporated firms from listing in India. The move could pave the way for reducing considerable tax liabilities for both the company and its investors in the event of ‘reverse flipping’ or moving registration to India.For the Budget, it has recommended to “set up an expert task force, with participation from the relevant government departments, regulators, industry representatives and legal experts, to recommend a comprehensive set of measures to make direct listing an attractive option for Indian origin foreign start-ups to consider.”