India will explore the possibility of allowing local companies to list on the London Stock Exchange, ministers from the two countries said on Monday, in a move that could allow start-ups in the South Asian country to access foreign capital for growth.
Outside of the New York Stock Exchange and Nasdaq, the London Stock Exchange is one of the largest and most heavily traded in technology stocks.
“We are particularly pleased that we have taken a major step forward with the first confirmation from India that it will explore the London Stock Exchange as an international destination for direct listings of Indian companies,” UK Finance Minister Jeremy Hunt said at a press conference.
India has for years been evaluating ways to help local companies access wider capital and reach higher valuations. The new trading comes at a time when dozens of startups in the country are eyeing a public listing.
Indian stock exchanges are dominated by financial services companies, consumer companies, energy and materials operators. In an analysis earlier this year, Mirae Asset predicted that India’s stock index would see disproportionate growth in technology stocks in the next two decades.
As Indian startups consider going public, they are likely to prefer exchanges where the public has a greater understanding of their business models and is more comfortable with the risk profile of technology companies.
Indian Finance Minister Nirmala Sitharaman confirmed that India is exploring the LSE, but did not provide any timetable for future updates.
More to track.