Nasscom proposes direct listing of foreign Indian startups

New Delhi, Aug 4 (KNN) The National Association of Software and Service Co. (Nasscom) has urged the Finance Ministry to prepare a framework which would allow Indian startups with externalized structures to list on the domestic markets, reported Mint.

The trade association has also reached out to the Securities and Exchange Board of India (Sebi), two people aware of the development told Mint.

About 16% of Indian-origin startups are not eligible to access the local markets due to their externalized structures. 

Only domestically incorporated firms are permitted for listing in India, as per current rules.

Following the global tech valuation downturn, the allure of listing overseas is fading away and a growing number of startups that had initially incorporated outside India, are now eager to tap the thriving domestic liquidity through local listings.

For instance, certain startups, like PhonePe, are considering a strategy known as ‘reverse flipping’ to realize the goal. However, this approach has a significant drawback, leading to considerable tax liabilities for both the company and its investors.  (KNN Bureau)