There is tremendous excitement in both India and the UK as the Indian parliament will shortly be introducing a Direct Overseas Listing Policy ("DOLP"). This new policy will allow Indian incorporated companies to list on select overseas stock exchanges, including the London Stock Exchange, without having to undertake the administratively burdensome and tax unfavourable processes currently in place.
Combined, India and the UK have considerable potential to raise record breaking amounts of money for Indian businesses. London is seen as the most international stock exchange with nearly 40% of its listed companies originating from outside the UK, while India is the world's third-largest start-up ecosystem and saw its start-ups raise $16.9bn of capital in 2021, even before the new DOLP can take effect. Furthermore, prior to the additional benefits brought about by DOLP, the majority of Indian companies listing abroad chose London with 71 Indian companies floating since the mid 1990s, raising approximately £20bn.
A London listing gives Indian companies the ability to tap into the UK's substantial investor appetite and capital, and those Indian companies then also gain access to an international and worldwide investor base. London also enables Indian business to track itself against global benchmark indices such as the FTSE 100 and FTSE 250, which further encourages foreign investors. In short, the investment appetite of the London Stock Exchange could help transform businesses which may not be able to raise the required funds when looking solely at the Indian market.
Naturally, Indian business owners might be nervous about taking such a step into foreign stock exchanges. However, our experience in the London market enables us to guide overseas companies through the process, provide commercial legal advice, and make valuable introductions and recommendations in respect of the various parties involved in the transaction. Additionally, London has multiple markets which are appropriate for businesses of varying sizes. Howard Kennedy specialises in listings across all these markets. If you have any questions on the process, the markets available, or need any helpful introductions, please contact Keith Lassman or Alexander Wood and we would be happy to assist.