India to change start-up listing rules

India is set to agree a shakeup of listing rules for startups this week amid rising fears of an exodus of fastgrowing technology companies to Singapore and the US, according to people familiar with the situation.

The Securities and Exchange Board of India (Sebi), the country’s markets regulator, is expected to greenlight the rules at a meeting on Tuesday, paving the way to launch a new trading platform later this year, with lighter regulation to attract listings from sectors such as eCommerce.

The move comes amid rising hopes that India’s burgeoning start-up scene may soon spawn a plethora of public offerings, buoyed by a record recent funding influx from global venture capital groups and heady expectations of future growth in the Indian internet economy.

But it also underlines worries that regulatory restrictions are pushing Indian start-ups to redomicile abroad, especially to Singapore, in turn increasing the odds that tech groups may eventually choose to list on exchanges abroad.

About three-quarters of start-ups receiving early stage financing in India this year will redomicile to Singapore, partly because of regulations making it easier to accept funding from global venture groups, according to iSpirit, a Bengaluru-based software trade body.

Uday Kotak, the billionaire founder of Kotak Mahindra bank and one of the country’s most respected financiers, warned that far less onerous listing rules were needed to tempt local technology businesses to tap domestic capital markets.