E-commerce firms in India especially the startups have been raising funds from venture capitalists. However, raising money from capital markets is a path not been taken by these startups due to regulatory reasons.
The current SEBI regulation tend more towards protecting the interests of investors and require detailed disclosures and strong financial positions that are necessary to ensure safety of investors’ money.
Startups have lobbied with SEBI and are seeking relaxation of many of these norms as valuations of these startups which operate in the digital space are linked to their future growth.
Representatives of the industry along with a number of venture capitalists met SEBI Chairman U K Sinha and a number of top officials a few months ago to discuss the matter.
A number of Indian firms are moving their base abroad. The regulations in India are making it difficult for these firms to work in India. India’s largest e-commerce company, Flipkart is planning to list itself on NASDAQ in mid 2016. The company plans to raise $5Billion from this IPO listing and is expected to be valued more than $30 Billion.
