India will not mandate secondary listings for firms joining overseas markets, sources say

* India preparing rules for firms to directly list abroad

* Concerns had grown India would force firms to list at home

* India has decided not to mandate secondary listing, say

* It is weighing seven nations for overseas listing, source
(Adds details, source comments; paragraphs 7-11)

NEW DELHI, Oct 15 (Reuters) – India has decided not to
mandate secondary listings for domestic firms that float shares
on a foreign stock exchange as it prepares to announce a new
policy within weeks, two senior government sources and two
industry executives told Reuters.

India is close to drawing up rules for companies to directly
float overseas without first having to list shares at home, as a
way to help startups attain higher valuations and access capital
more easily.

But concerns grew after officials privately told global
investors and companies in meetings they were considering
mandating a secondary listing for Indian firms on domestic
exchanges, as a way of ensuring investors and markets prospered,
Reuters has reported.

Asked about the proposal, a top government official directly
involved in the discussion said there would be no mandatory
requirement of a secondary listing, however.

“We will not mandate (secondary) India listing,” the
official said on Thursday, without explaining why the government
changed its stance. The official sought anonymity as the
discussions were private.

The finance ministry and capital markets regulator SEBI did
not immediately respond to a request for comment.

The new policy could be a shot in the arm for Indian unicorn
start-ups valued at more than $1 billion and the digital unit of
conglomerate Reliance, which is eyeing a U.S. listing
after raising more than $20 billion from investors such as KKR &

Japan’s SoftBank and an Indian payment firm it
backs, Paytm, as well as Reliance and U.S.-based Sequoia Capital
had told the government the secondary listing provision risked
splitting trading volumes, hurting long-term valuations and
raising compliance needs and costs, sources had said.

A second person familiar with the discussions said there
would be no public consultation on the rules, which will be
issued within 2 to 3 weeks.

The second person added that India was considering allowing
foreign listings in seven countries initially, among them
Britain, Canada, Switzerland and the United States.

The London Stock Exchange, which is tracking India’s
policy change closely, has told Reuters it has been in talks
with several Indian tech firms on overseas listings.
(Reporting by Aftab Ahmed, Aditya Kalra and Aditi Shah in New
Delhi; Editing by Clarence Fernandez)

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