The Corporate Affairs Ministry (MCA) is in talks with the Department of Economic Affairs (DEA) in the Finance Ministry to frame rules for enabling the direct listing of Indian companies on overseas exchanges at the GIFT City in Gujarat. GIFT City is the country’s sole International Financial Services Centre (IFSC).

“We are in discussion with DEA on this issue of direct listing. Once that is done, MCA will take a call. Rules would have to be formulated. Some rules have been drafted. We are consulting with DEA,” official sources said.

The Finance and Corporate Affairs Minister Nirmala Sitharaman had recently said the government is currently focused on enabling direct listing of Indian companies in GIFT City before looking at allowing them to list directly overseas.

In July this year, Sitharaman had at a SEBI event in Mumbai said that government has decided to enable the direct listing of listed and unlisted companies on overseas exchanges at the IFSC. 

Such a move would enable start-ups and companies of like nature to access the global market through GIFT IFSC, she had then said.

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It maybe recalled that Sitharaman had in May 2020 said that direct listing of securities by Indian public companies would be permissible in foreign jurisdictions. 

Overseas markets

Currently, Indian companies can access overseas equity markets only through depository receipts or by listing their debt securities on foreign markets. 

The Centre had in 2020 amended the Companies Act allowing the direct listing of Indian companies on foreign stock exchanges, but the framework has not been put in place so far.

The Centre has already announced intent to consolidate the laws dealing with the securities market in the country into a single securities market code. The three different laws of SCRA (Securities Contracts Regulation Act 1956; SEBI Act of 1992 and Depositories Act of 1996 are proposed to be consolidated into a single Act. 

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