The government has approved the direct listing of Indian Companies at GIFT- IFSC exchanges in the first phase. The eligible exchanges are the India International Exchange and NSE International Exchange, according to a notification from the finance ministry on Wednesday.
“In pursuance of the announcement on July 28, 2023 by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman to enable direct listing of Indian Companies at GIFT- IFSC exchanges in the first phase, the Department of Economic Affairs (DEA), Ministry of Finance, has amended Foreign Exchange Management (Non-debt Instruments) Rules, 2019, and notified the ‘Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme’,” reads the notification.
“Simultaneously, the Ministry of Corporate Affairs (MCA) has issued Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024,” it added.
The statement further reads that these provide an overarching regulatory framework to enable public Indian companies to issue and list their shares in permitted international exchanges. Currently, the framework allows unlisted public Indian companies to list their shares on an international exchange. SEBI is in the process of issuing the operational guidelines for listed public Indian companies. The international stock exchanges at GIFT-IFSC under the regulatory supervision of IFSCA, namely, India International Exchange and NSE International Exchange, have been prescribed as permitted stock exchanges under the Rules and the Scheme.
Earlier, through the Companies (Amendment) Act 2020, enabling provisions were included in the Companies Act 2013 to allow the direct listing of prescribed class (es) of securities of prescribed class (es) of public companies incorporated in India on permitted stock exchanges in permissible foreign jurisdictions or other prescribed jurisdictions. The enabling provisions of the Companies (Amendment) Act 2020 were, accordingly, brought into force from 30th October 2023.
“This policy initiative, to enable listing of Indian companies in GIFT-IFSC, will reshape the Indian capital market landscape and offers Indian companies, especially start-ups and companies in the sunrise and technology sectors, an alternative avenue to access global capital beyond the domestic exchanges,” said the finance ministry in the release.
“This is expected to lead to better valuation of Indian companies in line with global standards of scale and performance, boost foreign investment flows, unlock growth opportunities and broaden the investor base. The public Indian companies will have the flexibility to access both markets, i.e., the domestic market for raising capital in INR and the international market at IFSC for raising capital in foreign currency from global investors. This initiative will particularly benefit Indian companies going global and having ambitions to look at opportunities for expanding their presence in other markets. It is also expected to boost the capital market ecosystem at GIFT IFSC by providing new investment opportunities for investors, diversifying financial products, and enhancing liquidity,” it added.
GIFT-IFSC is India's maiden international financial services centre that connects India with global opportunities, enables the Indian economy to connect with the global financial system, and allows seamless and easy flow of global capital into India. To cater to the dynamic development needs of GIFT IFSC, the unified statutory regulatory authority, International Financial Services Centres Authority (IFSCA), has taken significant steps in accelerating global sustainable capital flows by providing an agile and world-class regulatory and business environment in GIFT IFSC.