Modi govt allows direct listing of securities by Indian companies on GIFT IFSC

India has okayed direct listing of shares of Indian companies at GIFT City's exchanges. The eligible exchanges are India International Exchange and NSE International Exchange, according to a finance ministry notification on Wednesday. 

Finance Minister Nirmala Sitharaman earlier this month said the Centre was going through the process of direct listing of stocks in GIFT IFSC in a "very systematic manner" and that firms should be able to access global funds easily." 

India had allowed certain classes of public companies to directly list on foreign stock exchanges in July 2023. "As of now, the framework allows unlisted public Indian companies to list their shares on an international exchange," the finance ministry said in a statement, adding that the Securities and Exchange Board of India (SEBI) is "in the process" of issuing the operational guidelines for listed public companies.

Direct listing of Indian companies' shares on GIFT City exchanges is the first step in allowing them to list overseas. Until now, Indian companies have not been permitted to list directly overseas markets, and instead use depository receipts — American Depository Receipts or Global Depository Receipts — to do so.

"This policy initiative...will reshape the Indian capital market landscape and offers Indian companies, especially start-ups and companies in the sunrise and technology sectors, an alternative avenue to access global capital beyond the domestic exchanges," the finance ministry note said. 

Indian companies will have the "flexibility to access both markets -- domestic market for raising capital in INR and the international market at IFSC for raising capital in foreign currency from the global investors". 

Finance ministry said the move will particularly benefit Indian companies going global and having ambitions to look at opportunities for expanding their presence in other markets.