MUMBAI: Finance Minister Nirmala Sitharaman made an announcement on Friday, July 28, stating that Indian companies are now permitted to opt for direct listing on foreign exchanges, including the International Financial Services Centre (IFSC) bourse in Ahmedabad. 

This nod comes after a three-year wait since it was initially proposed as part of the Covid relief package. The decision will enable domestic companies to raise funds from foreign sources by listing their shares on various exchanges abroad. The idea was first floated in May 2020 when the liquidity package was introduced during the pandemic.

"A direct listing of securities by domestic companies will now be permissible in foreign jurisdictions. I'm also pleased to announce that the government has taken a decision to enable direct listing of listed and unlisted companies on the IFSC exchange. So, this is a major step forward. This will facilitate access to global capital and better valuation," Sitharaman said during her speech.

The minister's address took place at an event that marked the launch of AMC Repo Clearing and a corporate debt market development fund aimed at bolstering the corporate bond market.

Furthermore, she emphasized the need for a regulatory impact assessment to help regulated entities and the market as a whole gain a deeper understanding of the consequences of their decisions.

Sitharaman also urged financial market regulators to focus on the quality, proportionality, and effectiveness of their decisions, ensuring that companies find it easier to conduct their business.

In addition, she encouraged large municipal bodies to explore funding options in the debt market. The government has been and will continue to incentivize cities to improve their credit ratings, enabling them to secure better pricing for their bonds.

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