NSE Chief Urges Startups And MSMEs To Consider Public Listing As Growth Tool

New Delhi, Jun 26 (KNN) National Stock Exchange (NSE) Managing Director and CEO Ashish Chauhan on Friday urged startups and MSMEs to view public listing as a strategic instrument for scaling businesses, rather than as a loss of control or an added compliance burden.

Speaking at the JITO Incubation and Innovation Foundation's (JIIF) Foundation Day event at NSE, Chauhan said public markets provide growth capital, improve governance standards, enhance credibility and help companies attract talent, all while allowing promoters to retain majority ownership. 

“Public listing lets founders raise growth capital without surrendering control,” he said, noting that promoters can offer 25 per cent of equity to the market initially, retain 75 per cent, and dilute further only as required. 

“When you list, you keep 75 per cent with yourself and offer 25 per cent to the market in the beginning. You can give more later. Control stays with you,” Chauhan added.

Valuation, Currency and Governance Benefits

The NSE chief said listed companies command valuations that private balance sheets cannot match, citing the example of a company earning an annual profit of Rs 2 crore potentially achieving a market capitalisation of Rs 40 to Rs 50 crore after listing. 

He added that a stock listing gave companies their own currency — enabling acquisitions, partnerships and employee stock option programmes. 

“A listed promoter can use stock to acquire other businesses, draw in partners and reward staff through stock options”, he said, citing Infosys’s early use of employee stock options under N. R. Narayana Murthy and Nandan Nilekani to attract talent it could not otherwise have hired.

On compliance, Chauhan said the burden was lighter than commonly assumed and was routinely managed by a company secretary.

Focus on Operations, Not Share Price

The NSE chief executive cautioned founders against tracking short-term stock price movements or chasing artificial trading volumes. 

"Your business is in your operations, not in the share price. The stock market is only a reflection of your business, it is not the business itself," he noted, adding that sustained profit growth would naturally be reflected in valuations over time.

NSE's SME Platform Track Record

On liquidity in the small and medium enterprise segment, Chauhan said, “Generating trading volume was not the company's responsibility and pointed to the market maker mechanism, under which two way quotes are provided for three years. Companies on NSE's SME platform, launched in 2012, had collectively raised more than Rs 21,700 crore and held a combined market capitalisation of more than Rs 2 lakh crore.”

(KNN Bureau)