Japanese multinational conglomerate SoftBank Group, that has financed several early stage companies in the country, sees a benefit for Indian start-ups raising funds from overseas listing.

The Companies (Amendment) Act, 2020 empowers the central government to allow domestic companies to list on foreign stock exchanges, without having to undertake prior or simultaneous listing in India or alternatively through incorporating foreign holding companies, KPMG observed in its report on the amendments, which got presidential assent on September 28, 2020. To make this operational, it would require changes in other laws and regulations including those relating to taxation and Foreign Exchange Management Act, 1999.

“Indian start-ups can go to Nasdaq or NYSE directly and raise a large amount of capital,” said Manoj Kohli, country head SoftBank India at a session organised by XLRI and Moneycontrol. He added that if the start-ups want to list in Bombay, that is fine. But if they want to enlist in international markets like London and New York, there is an option.

Kohli gave the example of food delivery and takeout start--up DoorDash where shares jumped 86 per cent on the first day of listing with a market capitalisation of $60 billion. SoftBank has reportedly made a handsome gain of around $11.2 billion from the public offering.

Kohli said that international listing will allow the discovery of real value and offer avenue to the Indian entrepreneurs to have access to a large amount of capital.

Legal observers are also of a similar opinion. “Indian start-up or emerging growth companies will be able to access capital from investors overseas that may be more receptive to their securities than Indian investors, who have typically focussed on companies with proven track records of profitability and growth and have generally exhibited less appetite for start-up or emerging growth companies,” said Gerald Manoharan, partner J. Sagar and Associates in a note.