Letter to BS: Indian firms should indeed be allowed foreign listings

Sebi must initiate measures to execute recommendation to enable our companies to list on external exchanges and also to permit foreign companies to list on Indian exchanges

This refers to the editorial “Globalising India Inc” (December 7). The country is part and parcel of the global economy and domestic companies’ health and growth are impacted by external economic forces. Prohibiting  domestic companies from raising funds from foreign capital markets through listings is inimical to the competitiveness of these entities. If allowed to list on foreign capital markets, domestic companies will be able to bolster resources from the foreign market. To be able to approach external exchanges, domestic companies have to ensure high efficiency, performance, health and credibility as per international standards. Given that will try to improve efficiency and the cascading effect will lead to an enhanced flow of foreign capital into the country.  

The listing of international companies on Indian exchanges will enable domestic investors to invest in the most efficient companies that deliver better returns. The most important merit of both the cases is that the investor can take advantage of competition if they remain vigilant about the governance, financial soundness and activities of the entities. The market regulator has to ensure preventive measures to stop companies from utilising the funds raised from foreign exchanges for fruitless pursuits. Various taxes levied on the returns on investments made in the domestic and external markets need to be affordable to attract investors. The Securities and Exchange Board of India must initiate measures to execute recommendation to enable our companies to list on external exchanges and also to permit foreign companies to list on Indian exchanges.

V S K Pillai   Mumbai

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