Govt allows direct listing of Indian companies on GIFT City's exchanges

The government today notified that Indian companies can directly list shares at GIFT City’s exchanges. According to an official communication from the Finance Ministry, the eligible platforms for this initiative include the India International Exchange and the NSE International Exchange.

Concurrently, the Ministry of Corporate Affairs (MCA) has released the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024.

At present, the structure permits unlisted public Indian companies to showcase their shares on global exchanges. SEBI is currently formulating the operational guidelines for Indian companies that are already listed. The GIFT-IFSC international stock exchanges, namely the India International Exchange and NSE International Exchange, are presently designated as permitted stock exchanges under the Rules and the Schemes.

Earlier, the MCA had declared that specific categories of public companies are eligible for a direct listing on international stock exchanges, aligning with Sitharaman's pronouncement made in July 2023.

The initiation of Indian companies' shares directly listing on the exchanges at GIFT City marks the inaugural stride towards enabling them to be listed internationally. The government, expressing its intent during the 12th India-UK Economic and Financial Dialogue in September 2023, hinted at contemplating the prospect of direct listings on the London Stock Exchange. Historically, Indian companies were not granted the permission to directly list on overseas markets; instead, they employed depository receipts, such as American Depository Receipts or Global Depository Receipts, for such endeavours.

“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. The public Indian companies will have the flexibility to access both markets i.e. domestic market for raising capital in INR and the international market at IFSC for raising capital in foreign currency from the global investors,” as per the statement.

GIFT-IFSC stands as India's maiden international financial services centre, acting as a vital link between India and global opportunities. It not only facilitates the integration of the Indian economy into the global financial system but also ensures inflow of global capital into India.