Indian companies can go for overseas listing: Nirmala Sitharaman

New Delhi, July 28

Finance Minister Nirmala Sitharaman on Friday said domestic companies could now go in for direct listing on foreign exchanges and the International Financial Services Centre (IFSC) in Ahmedabad. Direct listing will allow Indian companies to access foreign funds on various exchanges overseas.

“Direct listing of securities by domestic companies will now be permissible in foreign jurisdictions. I’m also pleased to announce that the government has taken a decision to enable the direct listing of listed and unlisted companies on IFSC exchanges. So, this is a major step forward. This will facilitate access to global capital and better valuation,” said Sitharaman while speaking at an event to launch a corporate debt market development fund (CDMDF), which is a bailout facility for debt funds. The provisions for direct overseas listing were approved by the government as part of the Covid relief package announced in May 2020 but the rules in this regard are yet to be notified.

To begin with, Indian companies will be allowed to list on the IFSC, and later, these will be permitted in specified seven or eight foreign jurisdictions. “It will act as a backstop facility for specified debt funds during periods of stress in debt markets, and this was announced by SEBI last month. Its function will involve purchasing investment-grade corporate debt securities when debt markets face a crisis,” said an official release.

The move will attract mutual funds and investors in the corporate debt markets while also improving secondary market liquidity in corporate debt securities. SBI Funds Management will serve as the investment manager of the CDMDF. The new policy will benefit unicorns or start-ups valued at more than $1 billion, and the digital unit of Reliance.

SEBI had earlier suggested listings on stock exchanges in 10 “permissible jurisdictions” with strong anti-money laundering regulations.