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In a move aimed at bolstering foreign investment inflows and offering growth avenues for Indian companies, the Government of India has approved the direct listing of securities by public Indian companies on the International Exchanges of the Gujarat International Finance Tec-City (GIFT IFSC).
According to a press release by the Ministry of Finance, this initiative, announced by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman on July 28 last year, is set to redefine the Indian capital market landscape. The Department of Economic Affairs (DEA), Ministry of Finance, has played a pivotal role in facilitating this move by amending the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, and notifying the 'Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme.' Simultaneously, the Ministry of Corporate Affairs (MCA) has issued the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024, providing a comprehensive regulatory framework for public Indian companies to issue and list their shares on permitted international exchanges. As per the current framework, unlisted public Indian companies can list their shares on international exchanges. The Securities and Exchange Board of India (SEBI) is in the process of issuing operational guidelines for listed public Indian companies. Notably, the international stock exchanges at GIFT IFSC, namely India International Exchange and NSE International Exchange, are currently designated as permitted stock exchanges under the new rules and scheme. The Companies (Amendment) Act, 2020, had earlier laid the foundation for the direct listing of specified classes of securities of public companies incorporated in India on permitted stock exchanges in permissible foreign jurisdictions. These enabling provisions came into effect on October 30 last year. This strategic move is expected to reshape the Indian capital market, offering Indian companies, especially startups and those in the sunrise and technology sectors, an alternative pathway to access global capital. It is anticipated to lead to enhanced valuations for Indian companies, aligning them with global standards. Furthermore, this initiative aims to augment foreign investment flows, tap into growth opportunities, and broaden the investor base for Indian entities. By providing flexibility for Indian companies to raise capital in both domestic and international markets, the initiative is poised to benefit companies with global ambitions, encouraging expansion into new markets. Additionally, it is anticipated to contribute to the capital market ecosystem at GIFT IFSC by diversifying financial products, providing new investment opportunities, and increasing liquidity. GIFT IFSC, India's first international financial services centre, serves as a vital bridge connecting India with global financial opportunities. Regulated by the International Financial Services Centres Authority (IFSCA), GIFT IFSC fosters a dynamic and world-class regulatory and business environment, facilitating seamless global capital flow into India. (ANI)
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