In an effort to boost foreign investments in the new under-construction business district, the Centre has permitted the listing of Indian companies on the international exchanges of the GIFT City in Gujarat’s Gandhinagar.
The Department of Economic Affairs (DEA) in the Ministry of Finance notified the ‘Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme’ after amending the Foreign Exchange Management (Non-debt Instruments) Rules on Wednesday.
Last year, Union finance ninister Nirmala Sitharaman announced that the procedure to allow the direct listing of Indian companies on GIFT City’s exchanges is underway. FM Sitharaman also said last week that this listing will proceed in a “very systematic manner”.
As per the recent notification of the Finance Ministry, the eligible international exchanges for the GIFT City are India International Exchange and NSE International Exchange.
“These, together, provide an overarching regulatory framework to enable public Indian companies to issue and list their shares in permitted international exchanges,” the finance ministry said in a statement.
GIFT-IFSC is a tax neutral financial centre, which aims to compete with hubs like Singapore as it provides fiscal incentives and an easier regulatory environment.
The notification issued on January 24 states that some of the eligibility criteria for companies to list on GIFT-IFSC exchanges is that the promoters or directors cannot be willful defaulters or fugitive economic offenders.
The main purpose behind allowing the direct listing of Indian companies on GIFT’s international exchanges is to boost foreign investment flows, unlock growth opportunities and broaden the investor base for Indian companies.
This is also being considered as the first step in allowing companies to list overseas. Notably, the Centre had said last year in the 12th India-UK Economic and Financial Dialogue that it is exploring the possibility to allow companies to list directly on the London Stock Exchange.
(With inputs from PTI)