Indian companies can list directly on IFSC exchanges in GIFT city

MUMBAI: Indian companies – listed and unlisted – can now directly list on the International Financial Services Centre (IFSC) in Gujarat’s GIFT City, finance minister Nirmala Sitharaman said on Friday.

Sitharaman, who was speaking at an event organised by markets regulator Sebi, said the move would help Indian companies access capital from investors from around the world and also get better valuations.
At present, Indian companies are allowed to list in overseas markets through the American Depository Receipt (ADR) and Global Depository Receipt (GDR) routes. Once the listing of Indian companies on IFSC exchanges is cleared, listing of these entities on foreign bourses could follow.

The move comes several years after the law was amended to provide for direct listing. However, things in this direction had moved in recent months after the finance minister in the 2020 Budget announced that the modalities would soon be in place for overseas listing of Indian companies. Detailed rules are expected to be notified soon, a senior finance ministry official told PTI. TOI in its edition on July 26 had said that the government was reviving the rules for overseas listing of Indian companies.
The FM also said that a securities markets code – which combines the three current acts related to the securities markets (SCRA, Sebi Act and Depositories Act) – will be a reality soon.
Sitharaman also launched a corporate bond market development fund, which, if needed, could work as a bailout facility for debt mutual funds. This fund is described as a backstop facility for stressed debt funds during periods of extreme volatility in the fixed income market.
The fund will purchase investment-grade corporate debt securities when debt markets face a crisis and support the market. Sebi had earlier announced setting up of such a backstop facility. Industry players had said that such a facility would bolster the confidence of mutual funds and investors in the corporate debt markets. It would also work towards improving liquidity in the corporate debt market.
The FM unveiled a limited purpose repo clearing facility for asset management companies that will be backed by Sebi and funded by MFs.