LSE listing for Indian firms only after norm for listing in IFSC finalised

LSE listing for Indian firms only after norm for listing in IFSC finalised

Subject: Economy

Section: Capital Market

Context:: Government to explore direct overseas listing of Indian firms on the London Stock Exchange (LSE) only after GIFT IFSC listing of domestic firms.

Key Points:

• The government will explore direct overseas listing of Indian firms on the London Stock Exchange (LSE)  only after a plan for overseas listing of domestic firms in the GIFT International Financial Services Centre (IFSC) in Gujarat is implemented

 What are likely benefits of LSE/international listing?

• Cross-border listing is expected to help Indian firms gain access to a larger base of investors,
• Bring their corporate governance standards to the best global practices.
• Indian entities, to get better access to international markets

What are the current international listing scenario for Indian companies? 

• Currently, Indian companies are not allowed to list directly on overseas exchanges as per regulations. However, listed Indian companies can use American Depository Receipts (ADR) or Global Depository Receipts (GDR) to make their shares accessible to overseas investors or list debt instruments on overseas exchanges.
• Overseas listing treatment to firms listing in GIFT IFSC would help the Indian firms take advantage of lenient tax rules for the offshore facility.
• The IFSC is being groomed by the government to make it an international financial hub on the lines of London that could act as a catalyst in attracting foreign investors to Indian corporates which are gaining global prominence and need a large pool of capital from the worldwide.