India Mothballs Plan to let Local Firms List Overseas-Sources

India has frozen its plans to allow domestic companies to list abroad as it seeks to boost its own capital markets, government officials and industry sources said, in a blow to foreign funds and stock exchanges looking to capitalize on the country's tech boom.

The Indian stock market boomed as eager retail investors and pandemic-induced money-making pushed prices to record highs, encouraging an influx of Indian tech founders to go local with initial public offerings (IPOs).

Three senior government officials have said that the plan has been put on hold as India believes there is enough depth in local capital markets for firms to raise funds and get good evaluations. 

More than 60 companies have debuted in India in 2021 and have raised a total of more than $13.7 billion, amounting to more than the previous three years combined. Like any other market around the world, the Indian market is also facing issues due to Russia’s invasion of Ukraine, resulting in delayed IPO plans.

But the outlook for such listings went down after Paytm backed China’s Alibaba and Ant and Japan’s Softbank plunged on its debut in November, raising multiple questions about valuations. Shares of Paytm has come down 75% from its issue price.