Govt May Allow Indian Companies For Direct Listing Overseas: Nirmala Sitharaman

Under current regulations, Indian firms are not allowed to list directly on overseas exchanges. They can only list on foreign exchanges through instruments such as depository receipts

Finance Nirmala Sitharaman at the joint press statement with Jeremy Hunt, Chancellor of the Exchequer of UK, after the India-UK Economic and Financial Dialogue, in New Delhi on Monday.

The Centre is exploring possibilities of direct listing of local companies at the London Stock Exchange, Finance Minister Nirmala Sitharaman said on Monday, signalling New Delhi could revive a plan put on hold due to domestic opposition and tax concerns. Sitharaman was speaking at a joint press conference with British Finance Minister Jeremy Hunt at the conclusion of the 12th India-UK Economic and Financial Dialogue. Under current regulations, Indian firms are not allowed to list directly on overseas exchanges. They can only list on foreign exchanges through instruments such as depository receipts.

Hunt said, "We are particularly pleased to have made a big step forward with the first confirmation by India that it will explore the London Stock Exchange as an international destination for the direct listing of Indian companies."

The plan to allow direct overseas listing of Indian companies was first announced in 2020, but was shelved following concerns around tax losses and opposition from a faction of the ruling party, which feared less Indian regulatory oversight of domestic firms that list abroad.

Hunt, alongside Sitharaman, ssaid, "There is a new pensions and insurance partnership" between the two countries, along with the establishment of a knowledge and expertise sharing mechanism.

"London is the world’s most international financial centre, the second-largest financial centre in the world, but the majority of our asset managers don’t invest in India. So, there is a huge opportunity. We are looking at changes to the way our pensions and insurance funds are regulated because there is a very strong desire on their part to invest more in productive assets. And we have huge pools of capital that are ready to be harnessed," Hunt stated in the briefing.

The two sides have also decided to deepen their "partnership on the development of GIFT City", he added.

Sitharaman told reporters that India and the UK "are highly encouraged" by the intensified collaboration in the area of financial services. "The UK expressed willingness to further extend its footprint in the GIFT City IFSC and foster a robust fintech partnership," she said.

Sitharaman and Hunt also announced the launch of the "new UK-India Infrastructure Financing Bridge".