The new framework allowing startups to list on the exchanges at Gujarat’s GIFT City has opened up doors for Indian companies to access foreign capital like never before. With the ability to list on the India International Exchange and NSE International Exchange, startups can now raise funds in Indian rupees as well as global currencies, boosting their valuation and scalability on a global level. Additionally, the new rules offer significant tax savings for investors, making it an attractive option for those looking to invest in the growth of Indian companies.
The Securities and Exchange Board of India (Sebi) is currently formulating operational guidelines to facilitate this process, which will enable both listed and unlisted public companies to list their shares directly on the bourses at GIFT City. Foreign investors operating from the International Financial Services Centre (IFSC) within GIFT City will be able to buy and sell shares of these companies on either the India International Exchange or the NSE International Exchange.
However, there are restrictions in place for investors from countries sharing a land border with India, including China. Prior approval from the government will be necessary for investments from these countries. Indian residents are also prohibited from trading shares on the stock exchange in GIFT City.
The ability to access overseas markets through the new framework provides a fresh option for Indian companies, expanding their reach beyond their current avenues of raising capital. While companies such as Infosys, Tata Motors, and Wipro have issued American Depository Receipts (ADRs) for trade on American stock exchanges, the listing on GIFT City’s international exchanges offers a more direct route for Indian companies to access global markets.
Foreign investors stand to benefit from this scheme as well, with the opportunity to invest in Indian companies and expect high returns. The tax exemption on capital gains arising from the transfer of equity shares listed on the IFSC exchanges makes it an attractive proposition for investors. The investor-friendly regulatory framework of GIFT City, along with the ability to transact in foreign currency, further enhances the appeal and security of investments.
With global investment banks like JP Morgan, Deutsche Bank, and Mitsubishi UFJ Financial Group already establishing their presence in GIFT City, the stage is set for startups and investors to reap the benefits of this new framework. As Indian startups take advantage of this opportunity to access foreign capital and showcase their potential on a global scale, the landscape of the Indian business ecosystem is sure to experience a significant transformation.
In conclusion, the listing opportunities provided by the exchanges in GIFT City present a game-changing development for Indian startups and investors alike. The ability to raise funds in multiple currencies, tax exemptions on capital gains, and a secure and attractive investment climate make GIFT City’s IFSC exchanges an appealing destination for the global business community. As startups embrace this new avenue and investors explore lucrative opportunities, the future of Indian entrepreneurship looks brighter than ever.
