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 these firms in raising about $50 billion, and in the process allowing private equity and venture capital funds to exit the 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 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 that have garnered funds will face investors seeking to exit. This would make the NSE’s platform an appropriate place to list for growth, said Vikram Limaye, managing director and chief executive officer of NSE.

“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 was the right time for them to list in India, he added. Earlier, the trend was to list firms on foreign bourses. But a lot has changed in the Indian capital market. So, a domestic IPO (initial public offering) would be the right thing to do, Limaye said.

On its SME platform, the NSE has around 300 such entities listed. The bourse has 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 that have not made any profit can

also list on bourses. Besides, the market regulator said the firms that had a valuation of over $50 million would be invited to have themselves listed. Sebi is also trying to ensure that disclosures made by start-ups are in real-time and less forward-looking.

Ishita Vora, head (listing) at the NSE, said these were 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 ~1 million, which makes it a viable option for HNIs. Retail investors have been asked to wait till the stock comes on the trading market,” she said.

Bourse aims to attract high net worth individuals who invest for the long haul, and not retail investors