BSE, NSE GIFT City units to be merged by Jan 2024; direct listing by April

On October 30, the Ministry of Corporate Affairs (MCA) released a notification permitting certain classes of public companies to directly list on foreign stock exchanges

The two operational international exchanges at GIFT City — BSE's India INX and NSE's International Exchange — will be merged by January end, said IFSCA chairperson K Rajaraman on December 6.

"The process is in its advanced stage and the merger should be completed in a month," he said while talking to the media on the sidelines of IVCA Private Credit Summit 2023.

The move is expected to bring more volumes in GIFT City exchanges. As per the official website, average daily turnover on international exchanges is $20 billion currently, majorly driven by GIFT Nifty contract.

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The advantages of trading in GIFT City are simple, all trades are dollar-denominated. Thus, foreign investors would not have to incur the extra cost of converting their currency and hedging it.

He further said that the notification for direct listing of Indian companies in GIFT City will also be out by April 2024.

On October 30, the Ministry of Corporate Affairs (MCA) had released a notification permitting certain classes of public companies to directly list on foreign stock exchanges.

"There are seven jurisdictions where direct listing will be permitted. Of these seven, GIFT City will be the first," Rajaraman said.

In July, finance minister Nirmala Sitharaman had first announced the proposal of direct listing and had said, "This is a major step forward. This will facilitate access to global capital and better valuation."

Currently, Indian companies can list on foreign exchanges through the GDR (Global Depository Receipt) route. Direct listing is expected to eliminate the need for GDRs, which help companies raise capital in foreign markets.

According to lawyers, the modalities of the notification will be keenly watched as Indian securities regulations and the securities regulations of the foreign jurisdiction, where Indian companies will seek listing, could bring some challenges and therefore follow-up rules and implementation will determine the real success of this notification.