Government approves listing of Indian companies on GIFT City’s exchanges

25 Jan 2024 , 10:23 AM

On January 24, the government announced the direct listing of Indian firms’ shares on the GIFT City markets. According to a statement from the Finance Ministry, the qualifying exchanges include India International Exchange and the NSE International Exchange.

The notice comes less than a fortnight after Finance Minister Nirmala Sitharaman stated at the Vibrant Gujarat Global Summit earlier this month that the government was going through the process of directly listing equities in GIFT IFSC in a ‘very systematic manner’.

And I’m convinced it will happen soon, said Finance Minister. On January 11, Sitharaman stated that Indian enterprises should have easy access to global funding.

Previously, in late October 2023, the corporate affairs ministry declared that certain classes of public firms might list directly on overseas stock markets, after Sitharaman’s announcement in July 2023. Today, the Corporate Affairs Ministry also announced the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024.

The direct listing of Indian companies’ shares on GIFT City exchanges is the first step towards allowing them to list overseas, with the government stating in September 2023, at the conclusion of the 12th India-UK Economic and Financial dialogue, that it was looking into direct listing on the London Stock Exchange. Until now, Indian firms have not been authorized to list directly abroad marketplaces, and instead utilize depository receipts – American Depository Receipts or Global Depository Receipts — to do so.

According to the January 24 notification, which amends India’s Foreign Exchange Management (Non-debt Instruments) Rules of 2019, a public Indian company may issue shares on the aforementioned exchanges if it, its promoters, promoter group, directors, or selling shareholders are not barred from participating in the capital market.

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