Why do companies list overseas?
Flipkart plans to launch an IPO by 2022, listing either in the United States or on the Singapore Exchange, not India where it is headquartered.
The Company has an interesting business structure, with headquarters in India, and incorporation in Singapore while the parent company is based out of the USA.
Listing in Singapore offers the unicorn the benefits of smoother approvals while listing in the US offers it a broader pool of capital.
With this, an interesting question that we face is: Why do companies choose to get listed abroad?
Some common reasons:
Access to a broader base of capital
Easier exit route for existing investors by access to a more liquid market
Mechanism to boost foreign sales
More Investor friendly rules
Lesser regulatory burden for listed companies
Enhance relationships with suppliers and customers
Capitalizing on a more established brand overseas
In this cutthroat competition, the definite winner is the exchange that manages to attract more foreign listings. With SEBIs recent efforts to approve the listing of Indian firms on foreign exchanges, it will be worthwhile to watch the changes domestic exchanges bring in to keep up and maybe, even surpass the competition