By using Gift City, Piyush Goyal encourages small businesses to consider dual listing.
On Monday, Piyush Goyal, the minister of commerce and industry, pushed small enterprises to think about dual listing to increase their possibilities for acquiring finance. The minister stated that small businesses have the choice to list on the SME platforms of the major bourses as well as on the Gift City in Gandhinagar.
A dual listing occurs when a security is listed on two or more separate exchanges. Due to the advantages of dual listings, which include better access to finance, more liquidity, and the possibility for shares to trade for extended periods on exchanges that are in separate time zones, businesses frequently employ them. Companies looking for a dual listing may be able to choose from a variety of listing categories on some exchanges, each with its own requirements and advantages. Speaking during a celebration for the 400th listing on the BSE’s SME platform, Goyal asserted that more sources of finance should be tapped to help the small business sector. He continued, “We also need to see if we can encourage some of these companies to pursue getting listed through the Gift City platform or a dual listing between Mumbai and the Gift City,” adding that the same option can also be explored by businesses wishing to list overseas. He asserted that a dual listing would enable investors to access both domestic capital and foreign funds that have either established themselves in the Gift City or are in the process of doing so. He stated it would be beneficial to make sure that foreign funds are aware of the SME platform and he encouraged the BSE to work to persuade foreign institutional investors and sovereign wealth funds to join in this exchange. “We need to effectively market the SME platform since it has a lot of promise. Additionally, we need to increase domestic investment and sensitise foreign investors” added Goyal. Additionally, he mentioned that up to 150 small businesses that were first listed on the SME platform are now trading on the main platform. Goyal claimed that the government, through programs like ECLGS and TReDS, had taken numerous steps to ensure an orderly resuscitation of SMEs after they were severely impacted by the pandemic. Overall, he continued, we were able to defeat the pandemic and manage the current geopolitical environment, particularly the crisis between Russia and Ukraine, in a way that did not undermine our industries’ spirit or confidence. Regarding startups, he noted that the nation is home to over 100 “unicorns” and 70–80 “soonicorns,” which are businesses on the verge of becoming unicorns, and added that the BSE ought to establish an interface with the startup ecosystem. In the resources sector, businesses research, develop and run global projects that demand substantial initial and continuous capital investments. Companies in this sector frequently keep their primary listings on exchanges outside the nation where their core assets are located. In some cases, this leads to a “knowledge gap” among investors, which can limit the market appreciation of the company on its primary exchange. Because they share similar social, economic, and political conditions, or because they are geographically close to the asset locations, or because they have a track record of successful peer operations, some global exchanges are particularly suited to specific commodities and asset regions. These exchanges give resource businesses access to investors who, at least theoretically, are thought to have a better understanding of certain assets and, as a result, ascribe greater value to the company on the market.
Such a move will benefit both parties because it will hasten their growth and promote the inflow of domestic capital into the startup ecosystem. He lamented the fact that domestic investors do not give the startup environment more attention. Companies that properly manage their dual listings achieve a good balance between the needs of their primary and secondary exchange, ensuring that their relevance with their investor base in the various markets is maintained.