Regulatory reforms may speed-up the return of IPO-Bound Startups in India
The elimination of a time-consuming compliance procedure by India is expected to hasten the return of overseas-domiciled Indian companies to their home country in order to take advantage of the listing boom.
This prediction comes from investors, bankers, and attorneys. A so-called "reverse flip" merger with a domestic subsidiary no longer requires approval from the backlogged National Company Law Tribunal, as of last month.
This effectively cuts the process's duration in half, from at least 12 to 18 months to three to four months. Many of the hundreds of Indian businesses that originally decided to locate overseas in order to have easier access to funding and pay lower taxes are now lining up to return home from financial hubs like the US and Singapore because of the improved chances for their initial public offerings in a nation that forbids dual listings.
At the time of its most recent funding in December 2021, the US-domiciled online payments company was valued at $7.5 billion, and it plans to relocate to India. According to LSEG data, IPOs in India, including those by startups Ola Electric and FirstCry, have raised $9.17 billion in the first nine months of this year, up from $4.68 billion in the same period last year. This makes India a unique bright spot for businesses in the Asia-Pacific region looking to raise equity capital.
Responding to this, Harshil Mathur, Co-Founder & CEO of Razorpay says, "India is a home market and a place where everybody knows and understands us. From a listing perspective, it makes sense to be in India”.
Similarly, Mehul Shah, a partner at corporate law firm Khaitan & Co states, "With the IPO market thriving, a reverse flip makes sense. Moreover, the streamlined merger process, designed to facilitate swift and efficient scheme approvals without court intervention, further supports this strategic move”.
