Indian Government Open to Allowing Companies to List in 7 Countries

Government of India soon to notify few of the select companies of their international listing

Tuesday, 20th October 2020

Indian Government has made arrangements for overseas listing of large Indian companies, which will probably not receive the desired valuation in India. These will include companies such as Reliance Jio, Life Insurance Corporation and startups, as the government will pave the way by relaxing several norms in order to facilitate the process.

It has been reported that the Ministry of Corporate Affairs (MCA) along with the department of economic affairs, have come to a consensus to dispense with the contentious clause of dual listing. This clause had hitherto required companies to list in India as well as overseas.

There are now seven countries in which Indian companies can directly list themselves-US, UK, Japan, Germany, France, Canada, South Korea. The list is subject to further extension, although Hong Kong remains a conspicuous exclusion given the current strains between India and China at the border.

Moreover, with operation of exchanges in the International Financial Centre at GIFT City, the trading of stocks abroad as well can get facilitated. For example, if NSE or BSE ties up with SGX, it can help the stock of an Indian company to be traded on the exchange in the GIFT City as well as Singapore. This, according to many, will be of great assistance to startups.

Until now, such a step of letting companies to list directly in foreign bourses, was considered dangerous grounds by policy makers. However, with recent changes in regulations, there is a notable difference seen in the government’s stance.

According to sources, the MCA has had discussions with investment bankers, Indian companies as well as bodies such as the US-India Business Council. This has also encouraged foreign exchanges who are helping the government to list some of the abroad, thus sending across a potent message about India’s openness to do business with the world.

Source: Times of India