NSE sees IPO pipeline by start-ups, e-tailers

Bourse expects to help firms raise $50 billion as investors exit

The country’s technology start-ups and e-commerce players may soon be the new entrants on the National Stock Exchange (NSE).

Taking on the Singapore Exchange and the Nasdaq, the NSE is looking to facilitate firms to raise about $50 billion, and in the process allow the private equity and venture capital funds to exit listed entities.

After starting the process of listing small and medium enterprises (SMEs), the NSE plans to coax major fence-hitters such as Flipkart and Amazon India to list on its Emerge ITP platform.

The top bourse is aiming at attracting high net worth individuals (HNIs) who invest for the long haul, and not retail investors.

In the next 12-24 months, several companies which garnered billions of funds from investors would look to exit. This will make the NSE’s platform an appropriate place to list for growth, Vikram Limaye, managing director and chief executive officer of NSE, said.

“In the past 5-7 years, a lot of capital has been invested in such companies. Close to 1,500 companies have received such investments. We believe that in the next 12-24 months several of these firms would be looking at listing as an exit option,” he said.

With a change in perception for tech-based firms, this is the right time for them to list in India, he added. Earlier, the trend was to list firms on the foreign bourses. But a lot has changed in the Indian capital market. So, doing an IPO (initial public offering) domestically would be the right thing, Limaye said.

Benefits of listing 

* Liquidity and exit events are among the biggest challenges for start-ups 

* In India, exits have mostly happened through acquisitions by private equity firms or larger corporates 

* Start-ups need to keep in mind that a public listing is one big source of exits 

* In this, India offers an advantage as the country has one of the most liquid public markets

On the SME platform, the NSE has around 300 such entities listed. The bourse had held talks with various industry players, including private equity firms and venture funds, to chalk out which companies can potentially list on its platform.

The NSE is planning to replicate what is happening in China where several companies, which earlier eyed overseas listing, are now looking at the mainland. The exchange has an IPO pipeline worth $500 billion.

The Securities and Exchange Board of India (Sebi) has changed certain norms so that companies which have not made any profit can also list on the bourse. Besides, the market regulator said the firms which had a valuation of over $50 million would be invited to get themselves listed. Sebi is also trying to ensure that the disclosures made by start-ups are real-time and less forward-looking.

Ishita Vora, head (listing) at the NSE, said these are not dividend stocks or annuity-based growth stocks.

“We have tried to ensure that retail investors do not participate in these stocks. On ITP, the minimum subscription has been kept at Rs 1 million, which makes it a viable option for HNIs. Retail investors have been asked to wait till the stock came on the trading market,” she said.