Govt allows direct listing of Indian companies on foreign exchanges
The decision has been well-received by the industry experts, who believe this move will provide Indian companies more flexibility and access to overseas funds.
NEW DELHI: The government has permitted certain classes of public companies to directly list on foreign stock exchanges from October 30, 2023. Though the details of the rules are yet to come, this sets the ball rolling for Indian firms seeking to list on exchanges in foreign jurisdictions.
The decision has been well-received by industry experts, who believe this move will provide Indian companies more flexibility and access to overseas funds. By enabling direct overseas listings, this initiative may eliminate the need for complex restructuring processes such as externalisation, which were previously undertaken to benefit from overseas listing.
Manan Lahoty, Partner at INDUSLAW, said, “The idea of allowing unlisted Indian companies to list overseas had gained momentum with the amendment made to the Companies Act in 2020... However, the detailed rules will be needed before the Indian companes can use this route to list.”
Punit Shah, Partner, Dhruva Advisors, said , “It will provide much needed flexibility to Indian companies and their investors to list wherever they get better valuations. It may obviate the need for any complex restructuring such as externalisation etc, to avail the benefit of overseas listing”.