Indian companies can now directly list on the International Financial Services Centre (IFSC) in Gujarat’s GIFT City, according to Finance Minister Nirmala Sitharaman. The move aims to provide Indian companies with access to capital from global investors and potentially improve valuations. Currently, Indian companies can only list in overseas markets through American Depository Receipts (ADRs) and Global Depository Receipts (GDRs). Once the listing on IFSC exchanges is approved, these companies may also list on foreign bourses. This development comes after the law was amended several years ago to allow for direct listings. Detailed rules for the process are expected to be announced soon.
Sitharaman also discussed the upcoming securities markets code, which will combine the Securities Contracts (Regulation) Act, the Securities and Exchange Board of India Act, and the Depositories Act. The code is expected to streamline and simplify regulations in the securities markets. Additionally, the Finance Minister launched a corporate bond market development fund that can potentially serve as a bailout facility for debt mutual funds during periods of extreme market volatility. This fund will support investment-grade corporate debt securities and help improve liquidity in the corporate debt market.
These measures aim to boost investment opportunities for Indian companies, attract foreign investors, and enhance market stability. By offering direct listings on the IFSC, Indian businesses will have increased opportunities to access global capital and potentially achieve better valuations. This move aligns with the government’s ongoing efforts to reform and simplify regulations to create a more conducive environment for businesses and investors. The introduction of the securities markets code and the corporate bond market development fund further showcases the government’s commitment to strengthening the financial sector and encouraging sustainable economic growth.
Overall, these initiatives are expected to contribute positively to India’s financial market ecosystem and attract more investments, further solidifying the country’s position as an attractive investment destination.
