Direct Listing of equity shares on International Exchange of GIFT IFSC permitted

Brief Overview:

Recent amendments permit public Indian companies to issue and list equity shares on international exchanges, such as the India International Exchange and NSE International Exchange. The Companies (Listing of equity shares in permissible jurisdictions) Rules, 2024, specify eligibility criteria, excluding companies with negative net worth or defaults on repayment to certain creditors.

Technical Details:

Key highlights of the amendments are as follows:

1) Public Indian companies have been permitted to issue equity shares and get the same listed on International Exchanges (currently being India International Exchange, NSE International Exchange) under the Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme.

2) The Companies (Listing of equity shares in permissible jurisdictions) Rules, 2024 has set out certain companies that are not eligible to issue and list equity shares as per above which includes a company having a negative net worth or a company that has defaulted on repayment to certain categories of creditors.

The above has been introduced by the following:

(a) Department of Economic Affairs, Ministry of Finance, has amended Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (“Rules”); and

(b) Ministry of Corporate Affairs has issued Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024.

JC Takeaways:

This new initiative is expected to improve the valuation of Indian companies, attract foreign investment, stimulate growth, and diversify the investor base. Indian companies can now raise capital in Indian rupees from the domestic market and in foreign currency from global investors at the International Financial Services Centre. This move will especially aid Indian companies with global aspirations and expansion plans.

For further details, please see:

FEMA | Non-Debt Rules
MCA | Listing equity shares

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