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Centre allows direct listing of securities by Indian companies on international exchanges of GIFT IFSC

The Division of Financial Affairs (DEA) underneath the Ministry of Finance has amended the Overseas Trade Administration (Non-debt Devices) Guidelines, 2019 and notified the direct itemizing of fairness shares of corporations integrated in India on the worldwide exchanges scheme.

As per a notification from the finance ministry, the eligible exchanges are the India Worldwide Trade and the NSE Worldwide Trade.

The notification comes lower than a fortnight after Finance Minister Nirmala Sitharaman had mentioned on the Vibrant Gujarat World Summit earlier this month that the federal government was going by way of the method of direct itemizing of shares in GIFT IFSC in a “very systematic manner”.

“And I am confident it will happen at the earliest. With that, Indian companies should be able to access global funds easily,” Sitharaman had mentioned on January 11.

Earlier, in late October 2023, the company affairs ministry had mentioned sure courses of public corporations can straight record on overseas inventory exchanges after Sitharaman had introduced the identical in July 2023. Right this moment, the company affairs ministry additionally issued the Corporations (Itemizing of Fairness Shares in Permissible Jurisdictions) Guidelines, 2024.

“These, together, provide an overarching regulatory framework to enable public Indian companies to issue and list their shares in permitted international exchanges. As of now, the framework allows unlisted public Indian companies to list their shares on an international exchange,” the finance ministry mentioned in a press release, including that the Securities and Trade Board of India (SEBI) is “in the process” of issuing the operational pointers for listed public corporations.

The direct itemizing of Indian corporations’ shares on GIFT Metropolis exchanges is step one in permitting them to record abroad, with the federal government saying in September 2023 on the finish of the twelfth India-UK Financial and Monetary Dialogue that it was exploring the potential for direct itemizing on the London Inventory Trade. Till now, Indian corporations haven’t been permitted to record straight abroad markets, and as a substitute use depository receipts — American Depository Receipts or World Depository Receipts — to take action.

As per the January 24 notification, which amended India’s Overseas Trade Administration (Non-debt Devices) Guidelines of 2019, a public Indian firm is permitted to problem shares on the aforementioned exchanges if it, any of its promoters, promoter group, administrators, or promoting shareholders will not be debarred from accessing the capital market.

Additional, not one of the promoters or administrators of the corporate must be a promoter or director of one other Indian firm which is debarred from accessing the capital market. Among the different eligibility standards embrace promoters or administrators not being wilful defaulters or fugitive financial offenders.

“This policy initiative…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 finance ministry mentioned.

“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,” it added.



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