During the 12th annual India-UK Economic Financial Dialogue, India’s Finance Minister Nirmala Sitharaman announced that the government is considering allowing Indian firms to list directly on the London Stock Exchange (LSE) after implementing a plan for overseas listing of domestic firms in the GIFT International Financial Services Centre (IFSC) in Gujarat. This decision follows discussions with the UK Chancellor of the Exchequer Jeremy Hunt, who expressed enthusiasm for India exploring the LSE as a destination for direct listing of Indian companies.
The move towards cross-border listing is expected to provide Indian firms with access to a broader investor base and align their corporate governance practices with global standards. This decision may open up new opportunities for Indian entities, such as improved access to international markets and a larger pool of investors.
The International Financial Services Centres Authority (IFSCA) aims to establish the framework for direct listing of companies on IFSC exchanges by the end of 2023. Previously, Indian companies were not permitted to list directly on overseas exchanges, but they could use American Depository Receipts (ADR) or Global Depository Receipts (GDR) to make their shares available to foreign investors or list debt instruments on international exchanges.
Expanding the benefits of overseas listing to firms in GIFT IFSC could make it an attractive hub for global investors, bolstering the growth of Indian corporates on the world stage.
Additionally, both India and the UK are actively working to expedite discussions leading to the signing of a Free Trade Agreement (FTA) and Bilateral Investment Treaty (BIT) to strengthen their economic ties.
Re-reported from the article originally published in The Financial Express