No Flurry of Indian Startup IPOs Seen on Liquidity Concerns

India’s loosening of rules for listing startups is unlikely to lead to a flurry of initial share sales as poor liquidity and a lack of experience in valuing internet and technology companies hamper investor appetite.

The market regulator’s decision this week to ease rules governing profitability, use of funds and valuation methodology, are a good first step in opening up the market, though finding a large pool of investors will be a challenge for the first crop of IPOs, U.R. Bhat, a director at the Indian unit of Dalton Strategic Partnership LLP, a U.K.-based investment management company.