SEBI could alter norms that require companies to use proceeds from a public listing to build tangible assets or buy plant and machinery and the regulator is preparing to unveil a consultation paper for the end of March, 2015 on listing norms for micro, small and medium enterprises, indiatimes.com reports, citing Reuters.
Indian companies such as online retailer Flipkart and mobile advertising firm InMobi have domiciled in Singapore and software product think tank iSpirt estimates that nine of the top 30 business-to-business software product companies in India have already relocated to the US, Singapore and the UK. These 30 companies are worth about USD 6.2 billion (Rs 38,877 crore), employing almost 18,000 people.
Among those known to be preparing for an IPO in the near future are online retailers Flipkart, Snapdeal and Infibeam, business-to-business portal India-Mart and marriage listings website Bharat Matrimony. Of these, Flipkart is almost certain to list in the US. Most of Indias tech companies such as MakeMyTrip, Genpact, Rediff and EXL Services are listed on either NYSE or Nasdaq.
Startups cite a variety of reasons for not being able to list in India. Ecommerce companies especially are looking at listing overseas in the long run as Indian rules require companies to be profitable for at least one out of two immediately preceding financial years before issuing a public offer of shares. The National Stock Exchange prescribes that no disciplinary action by other stock exchanges and regulatory authorities in the past should have been taken against the company. Besides startups, removal of the profitability clause will also help sectors such as airlines, where most companies are loss-making and in dire need of capital.
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