Good morning this Monday. This is Vedica with today's update. Hope you all had a nice relaxed weekend. I got some hiking done which was quite nice since I've mostly been stuck at home for a while now. Some big news to kick-start the week as it looks like Indian companies might be able to list overseas, and Razorpay looks set to be the next Indian unicorn.
➡️ The Lok Sabha on Saturday night passed the Companies (amendment) Bill 2020 that aims to allow public companies to directly list certain prescribed classes of securities in foreign jurisdictions. Under the current legal framework, Indian companies cannot directly list their securities abroad without getting themselves listed in domestic bourses.
➡️ The amended law seeks to “permit direct overseas listing of Indian corporates securities in permissible foreign jurisdictions through an enabling provision.” However, it's worth noting further details are still not available. The bill is largely focused on decriminalisation of various provisions under the companies law, and this point of direct overseas listing seems to have been an addition.
➡️ The rules are being drafted by the finance and corporate affairs ministries, in discussion with the capital markets regulator Securities and Exchange Board of India (SEBI), and will be finalised in coming weeks. Currently, Indian companies can list locally and then access foreign equity capital through instruments like American Depository Receipts (ADRs), a route used by Infosys and ICICI Bank in the past.
➡️ The bill will have to be passed by the upper house to become and Act, which given the shenanigans the government pulled to pass the controversial Farmers Bill seems to be more or less a given. As always though, the devil is in the detail, so we'll have to see what drafts rules the Finance Ministry comes out with on foreign listings.
2. https://bit.ly/2EhIYvo: Razorpay set to be unicorn with ~$150M round led by GIC
➡️ Business-focused payment gateway and neo banking platform Razorpay is in advanced talks with Singapore’s GIC and existing investors to raise money in a fresh round, Entrackr reports. This would be the first time in 2020 the company will raise money. It raised $75M led by Ribbit Capital in June last year.
➡️ Sources say that Singapore government-owned GIC will lead the financing round at a valuation $1B+ billion. The size of the round mix of primary and secondary capital is likely to be in the range of $120 to $150M. In addition to GIC, Sequoia and Ribbit are likely to participate in the round with some early backers including angels set to exit.
➡️ The company’s neo banking platform RazorpayX has been positioned as an anchor pitch for the fresh fundraise. Launched almost a year ago, RazorpayX Neo Banking works with over 5,000 merchants. It offers several products such as banking, payroll and vendor management, payout links and loan requirements.
➡️ Razorpay will become the fourth unicorn in the overall payments space in India after Paytm, Billdesk and Pine Labs if the deal goes through. Not only will the company’s valuation will jump over 2.2X in the new round, perhaps more importantly it will become the first unicorn from the neo banking space (where it competes most closely with Tiger Global-funded Open.)
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