Nasdaq In Talks With Indian Authorities To Unlock Global Listing Opportunities For Local Companies

The US stock exchange Nasdaq has engaged in discussions with Indian authorities to potentially enable direct listings of Indian companies on foreign stock exchanges to bolster India's presence on the global financial stage. The move, if realized, could reshape the financial landscape for Indian businesses, providing them with broader access to global capital.

Nasdaq's Executive Vice Chairman, Edward Knight, revealed that talks were held in October with Indian Finance Minister Nirmala Sitharaman and SEBI Chairperson Madhabi Puri Buch. The discussions centred around the possibility of allowing Indian companies, particularly those in the technology sector, to list abroad, beyond Gujarat International Finance Tec-City (GIFT). Nasdaq emphasized that foreign bourses should not be excluded from the policymaking process.

"We are hopeful that when they (rules) are finally promulgated, it will facilitate the listing of companies not only here in GIFT City but also other jurisdictions," Knight said during an interview on the sidelines of a conference near GIFT City, where Prime Minister Narendra Modi is actively courting foreign investment ahead of a re-election bid.

Currently, Indian companies face restrictions that prevent direct listings on overseas markets. The GIFT City project, launched in Gujarat in 2011, was envisioned to become a global financial hub, offering Indian companies access to international capital markets. However, regulations for direct listings on GIFT's International Financial Services Centre (IFSC) are still pending finalization.

In October, India's corporate affairs ministry made amendments to the law, paving the way for Indian businesses to list overseas directly. However, specific details regarding the implementation of these changes have not been made public. Sources familiar with the process suggest that the government is considering permitting listings on the IFSC initially, with direct listings on foreign exchanges following suit.

Knight emphasized the potential of easing the process for Indian companies to list outside India as a means to attract continued foreign direct investment. "Question is, will that continue, and one way to facilitate that is to make it easier for Indian companies to initially list outside India," he remarked.

Notably, Nasdaq has ambitious plans for India. Knight announced that Nasdaq is gearing up to launch an exchange-traded fund (ETF) named QQQ on IFSC, which will track the NASDAQ 100 Index, representing the top 100 Nasdaq companies.

India currently boasts the world's third-largest startup ecosystem, with an expected annual growth rate of 12-15%, according to government sources. In 2018, the country had around 50,000 startups, with approximately 9,000 focusing on technology. Some of these startups have attracted investments from global giants such as SoftBank and Sequoia Capital.

Prominent investors, including Tiger Global, Sequoia Capital, and Lightspeed, have previously urged the Indian government to expedite regulations facilitating overseas listings. Knight emphasized that while Indian markets are not inadequate, providing another option for listing is crucial, not just for entrepreneurs but also for venture capitalists.