Public Listing: A Strategic Tool for Growth Without Sacrificing Ownership
National Stock Exchange (NSE) Managing Director and CEO Ashish Chauhan stated on Friday that public listing enables founders to raise growth capital without losing control of their businesses. Speaking at the JITO Incubation and Innovation Foundation's (JIIF) Foundation Day event at the NSE, Chauhan urged startups and micro, small, and medium enterprises (MSMEs) to view public listing as a strategic tool for scaling operations rather than a threat to ownership.
Retaining Control While Accessing Public Markets
Chauhan explained that public markets provide growth capital, improve governance standards, enhance credibility, and help companies attract top talent while allowing promoters to retain control. He noted that a promoter can initially offer 25% equity to the market, retaining 75%, and dilute further only as needed. "When you list, you keep 75% with yourself and offer 25% to the market in the beginning. You can give more later. Control stays with you," Chauhan said.
Valuation Benefits and Capital Raising Potential
The NSE chief highlighted that public markets reward profitable businesses with valuations unmatched by private balance sheets. A company earning an annual profit of Rs 2 crore could command a market capitalisation of Rs 40 to 50 crore once listed, providing room to raise capital, bring in partners, and expand operations. Listing also gives a company its own currency, allowing promoters to use stock for acquisitions, attracting partners, and rewarding employees through stock options.
Addressing Concerns About Hostile Takeovers
Chauhan addressed concerns that listing exposes founders to hostile takeovers, stating that control stays with the promoter and no change of ownership can occur against a founder's wishes. He cautioned founders against chasing artificial trading volumes, emphasizing, "Your business is in your operations, not in the share price. The stock market is only a reflection of your business; it is not the business itself." He added that share prices follow sustained profit growth, and founders should focus on operations rather than short-term price movements.
Focus on Building Profitable, Sustainable Businesses
Chauhan advised founders to direct their energy toward building profitable, sustainable businesses rather than being distracted by temporary market shifts. "If you are doing a business of Rs 10 crore or Rs 20 crore, you should be planning for Rs 200 crore and beyond," he said. The keynote comes days after the NSE filed its draft prospectus for a public offering.
NSE SME Platform Success and JIIF Achievements
Companies on the NSE's SME platform, launched in 2012, have collectively raised more than Rs 21,700 crore and hold a combined market capitalisation of more than Rs 2 lakh crore. JIIF Chairman Jeenendra Bhandari stated that over the past two years, the foundation successfully completed four incubation cohorts and facilitated over Rs 60 crore in startup investments. Bhandari added that the foundation secured a Rs 5 crore MSInS grant and a Rs 2 crore SISFS grant to further strengthen the innovation ecosystem.
