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Direct Listing of Indian Companies in GIFT City



  Aug 07, 2023

Direct Listing of Indian Companies in GIFT City


What is GIFT City?

Answer: GIFT City (Gujarat International Finance Tec-City) is India's first International Financial Services Centre (IFSC), located in Gandhinagar, Gujarat. It is a designated area that offers a business-friendly environment for financial services and related activities.
 

What is the recent development regarding listing in GIFT City?

Answer: The Finance Minister announced that Indian companies will soon be allowed to directly list on overseas exchanges and the exchanges located in GIFT IFSC (International Financial Services Centre).
 

How can Indian companies currently list on overseas exchanges?

Answer: As of now, listed Indian companies can use American Depository Receipts (ADRs) or Global Depository Receipts (GDRs) to make their shares accessible to overseas investors or list debt instruments on overseas exchanges.It is complex and cumbersome and startups find it even more difficult.
 

What benefits will Indian start-ups get from direct overseas listing?

Answer: Direct overseas listing will provide an exit route for domestic start-ups and enable them to command healthy valuations from foreign investors.
 

What advantages does GIFT City offer to attract investors?

Answer: GIFT City provides a business-friendly environment, lenient tax rules, and allows both domestic and foreign investors to invest in instruments offered at the IFSC.
 

How will direct listing in GIFT City benefit domestic investors?

Answer: With Indian companies listing their shares in GIFT City, domestic investors can take advantage of the lenient tax rules and invest through the liberalized remittance scheme, enabling them to access investment opportunities not available in the domestic market.
 

How can GIFT City attract foreign investors?

Answer: By hosting highly popular public issues and follow-on public offers of listed Indian companies, GIFT City can attract foreign portfolio investors and become a prominent offshore center.
 

What are the concerns regarding direct listing in GIFT City?

Answer: Regulators need to be cautious while approving listing requests from domestic companies to ensure that only credible companies are allowed, preventing any erosion of credibility in GIFT City.
 

What could be a future development for GIFT City exchanges?

Answer: In the future, a link could be established between onshore stock exchanges and GIFT City exchanges, similar to the Shanghai-Hong Kong stock connect, enhancing cross-border investment opportunities.


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