Government Allows Direct Listing Of Indian Firms In GIFT City

The Union government has allowed the direct listing of equity shares of companies incorporated in India on the International Exchanges Scheme, with the aim to allow access to global capital, foreign investments and enable better valuation of Indian companies in line with global standards.

Public Indian companies, listed or unlisted, can now list their stocks on the BSE India International Exchange and NSE International Exchange at the Gujarat International Finance Tec-City under the framework, according to the notification by the Ministry of Finance issued on Wednesday.

Eligibility Criteria

Currently, the framework allows unlisted public Indian companies to list shares on an international exchange. The Securities and Exchange Board of India is in the process of issuing the operational guidelines for listed public Indian companies, as per the FAQs released by the Finance Ministry on the Direct Listing Scheme.

Such companies will also be required to adhere to the regulatory framework of permitted international exchanges in GIFT-IFSC.

The equity shares listed on international exchanges will be counted towards the foreign holding of the company. It is not mandatory for an unlisted company intending to list on international exchanges to also list on domestic exchanges.

The unlisted public companies will be required to file the prospectus in e-Form LEAP-1, related to listing of equity shares in permissible jurisdictions, within seven days after the same has been finalised and filed in the permitted international stock exchange.

Finance Minister Nirmala Sitharaman in July last year had made the announcement about the direct overseas listing of domestic companies.

GIFT City is the maiden international financial services centre that has been set up in India, with the objective to bring back those India-related financial services and transactions that are currently carried outside of India.