India will explore the possibility of allowing local firms to list on the London Stock Exchange, ministers from both the nations said Monday, in a move that could allow firms in the South Asian nation to gain access to foreign capital for growth.

Outside of the New York Stock Exchange and Nasdaq, the London Stock Exchange is one of the largest and tech stocks-heavy exchanges.

“We are particularly pleased to have made a big step forward with the first confirmation by India that it will explore the London Stock Exchange as an international destination for the direct listing of Indian companies,” said Jeremy Hunt, UK Chancellor of the Exchequer.

India has been evaluating ways to help local firms access broader capital and reach higher valuations at a time when scores of startups in the country are eyeing a public listing. It has even considered a dual-listing, but until now the regulation has prohibited Indian firms from listing overseas.

Financial services firms, consumer companies, energy and material operators dominate the Indian stock exchanges. In an analysis earlier this year, Mirae Asset projected that the Indian stock exchanges’ index will see a disproportional growth in tech stocks in the next two decades.

As Indian startups consider going public, they are likely to favor exchanges where the audience possesses a greater understanding of their business models and is more comfortable with the risk profile associated with tech firms.

More to follow.


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