The Ministry of Finance has amended Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and notified the 'Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme.' The Ministry of Corporate Affairs has also notified Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024. These, together, provide an overarching regulatory framework to enable public Indian companies to issue and list their shares in permitted international exchanges.
This enables the direct listing of securities by Indian public companies on International Exchanges of the GIFT IFSC (IE-GIFT). The Securities and Exchange Board of India (SEBI) shall be issuing the operational guidelines for listed public Indian companies. Some of the key highlights are as under:
- A listed Indian company may issue fresh equity shares on IE-GIFT, or the existing shareholders may make an Offer for Sale (OFS).
- Interestingly, the notification also allows unlisted public Indian companies to list their shares on an IE-GIFT, thus an unlisted Indian company may also directly list on an international exchange or their shareholders may make an OFS.
- FPI investment limits to be adhered to. Sectoral Guidelines, Valuation/ Pricing Guidelines applicable.
- Only non-residents are permitted to invest. Thus, Indian families intending to invest in Indian securities cannot hold their investments through IE-GIFT.
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Our Comments This is one of the most awaited notifications to permit Indian companies to list on the IE-GIFT and non-resident community to access a broader investment base. This is likely to help companies attract better valuation with the widened base. The public Indian companies will have the flexibility to access both markets, i.e., the domestic market for raising capital in INR and the international market at IFSC for raising capital in foreign currency from 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. It is also expected to provide a boost to the capital market ecosystem at GIFT IFSC by providing new investment opportunities for investors, diversification of financial products and by enhancing liquidity. |
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