NEW DELHI: As a first step to let Indian companies to directly list on overseas exchanges, the government on Wednesday allowed direct listing of Indian Companies at GIFT- IFSC exchanges.
The government also notified the “direct listing of equity shares of companies incorporated in India on international exchanges scheme”, an overarching framework for issuing and listing of equity shares of public Indian companies on international exchanges.
Prior to this, Indian companies were not allowed to issue or list equity shares abroad. To begin with, the new 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, said finance ministry on Wednesday.
The scheme will allow public Indian companies, mainly start-ups and companies in the sunrise and technology sectors, to access global capital beyond the domestic exchanges. This is expected to enable better valuation of Indian companies in line with global standards of scale and performance, boost foreign investment flows, unlock unprecedented growth opportunities, and broaden investor base.
In addition, the public Indian companies will have the flexibility to access both markets -- domestic market for raising capital in rupee and the international market at IFSC for raising capital in foreign currency from the 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, said the government.
Companies, which aim to list their shares in Gift City, can do so by listing their shares on two stock exchanges namely India International Exchange (IFSC) Limited and NSE IFSC Limited, subsidiaries of BSE Limited and National Stock Exchange of India, respectively.
As per FAQs shared by the ministry, foreign investors can participate in Indian companies via GIFT-IFSC, allowing them to benefit from a business-friendly regulatory system. Transactions on the stock exchanges in IFSC are in foreign currency, removing currency risk for investors.
These stock exchanges have extended trading hours, making it convenient for investors from different parts of the world. GIFT-IFSC offers tax incentives under the Income Tax Act, 1961, making it an attractive destination for global investors. Capital gains from selling shares of Indian companies in GIFT-IFSC are exempt from tax.