It is expected that the SEBI framework will be the basis for future regulation for direct listing
FinTech BizNews Service
Mumbai, 1 November, 2023: MCA has now allowed direct listing of public companies on foreign stock exchanges as per recent notification. Certain Indian public companies are from October 30 allowed to issue securities for the purpose of listing on foreign stock exchanges in permissible foreign jurisdictions. Mahavir Lunawat, Managing Director, Pantomath Capital Advisors, has an interesting perspective to share on this.
Mahavir explains: “The green light for direct listing on foreign exchanges is a significant move as it will now enable Indian companies to become global. The overseas listings by local listed entities were carried out via American Depository Receipts (ADRs) and Global Depository Receipts (GDRs), with this move, the GDR won’t be required any longer. SEBI had previously recommended a framework within which such direct listing was to be facilitated, and it is expected that the SEBI framework will be the basis for future regulation for direct listing. Foreign investors have already been trading in products like the GIFT Nifty, which was earlier known as SGX nifty in Singapore. With this move, foreign investors would now have easy investment access to both listed and unlisted Indian companies which would also be cost effective to investors as the process would be dollar denominated with no requirement of rupee conversions. This will further result in lower transaction cost, which will in turn will increase the investor’s returns. The goal is to expedite the growth of financial landscape of India, while integrating us in the global economy and this step is in that direction. Overall, this move would empower Indian businesses to raise global capital with ease and grow beyond boundaries.”
