In response to the announcement made on July 28, 2023, by Union Minister for Finance and Corporate Affairs, Ms. Nirmala Sitharaman, regarding the direct listing of Indian companies on GIFT-IFSC exchanges, the Ministry of Finance’s Department of Economic Affairs (DEA) has amended the Foreign Exchange Management (Non-debt Instruments) Rules, 2019. The newly introduced ‘Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme’ is accompanied by the Ministry of Corporate Affairs (MCA) issuing the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024. This regulatory framework facilitates public Indian companies to issue and list their shares on permitted international exchanges, initially allowing unlisted public Indian companies to do so.
Securities and Exchange Board of India (SEBI) is formulating operational guidelines for listed public Indian companies. The India International Exchange and NSE International Exchange at GIFT-IFSC are presently recognized as permitted stock exchanges. The Companies (Amendment) Act, 2020, paved the way for such direct listings, and these provisions came into force on October 30, 2023. This policy initiative is poised to reshape the Indian capital market, offering companies, particularly startups and those in the technology sectors, an alternative pathway to global capital. The move is anticipated to enhance the valuation of Indian companies, align them with global standards, attract foreign investments, unlock growth potentials, and broaden the investor base.
Public Indian companies will now have the flexibility to access both domestic and international markets, enabling them to raise capital in Indian Rupee (INR) domestically and in foreign currency at IFSC from global investors. This initiative is expected to benefit Indian companies with global aspirations and ambitions for expanding their presence in international markets, ultimately contributing to the growth of the capital market ecosystem at GIFT IFSC.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.