Indian firms can now directly list on IFSC exchanges

Operations at Gujarat International Finance Tech (GIFT) city International Financial Services Centre (IFSC) has expanded at a rapid pace in recent years.

India companies can list their shares directly on foreign exchanges at the International Financial Services Centre (IFSC) in Gujarat International Financial Tech (GIFT) City in Gujarat, finance minister Nirmala Sitharaman said on July 28, a move that will give domestic firms access to foreign funds.

“I'm pleased to announce that the government has taken a decision to enable direct listing of listed and unlisted companies on the IFSC exchanges,” Sitharaman said at an event in Mumbai. “This will also facilitate access to global capital and result in better valuation of the Indian companies.”

The move comes amid demand from industry that Indian companies be allowed to list directly abroad. In May 2020, the government had allowed direct listing of securities by Indian public companies in foreign jurisdictions but no law or framework was drawn to take the move forward for almost three years.

In March 2022, news agency Reuters said the plan had been put on hold to bolster the local capital market. Three government officials told Reuters India believed there was enough depth in local market for firms to raise funds and get good valuations.

In recent years, operations at Gujarat International Finance Tech (GIFT) city’s IFSC have expanded at a rapid pace.

Earlier this month, SGX Nifty was rebranded as GIFT Nifty and trading shifted to NSE IX from SGX, Singapore.

On July 25, GIFT Nifty derivatives on NSE International Exchange (NSE IX) reported record single-day trading of more than 3,14,900 contracts with a turnover of $12.39 billion. Traded contract volume and turnover value witnessed a growth of over 838 percent and 924 percent, respectively, compared to the first day full-scale operations volume of 33,570 contracts and a turnover of US $1.21 billion.

Trading turnover on NSE IX has been growing exponentially since the commencement of the full-scale operation of NSE IX-SGX GIFT Connect on July 3, the exchange said. Since the first day of full-scale operations of the Connect, Gift Nifty has witnessed a cumulative volume of 11,09,115 contracts with a turnover of $42.89 billion.