Direct listing on exchanges at IFSC soon

Direct listing on exchanges at IFSC soon

Subject: Economy

Section: Capital Market 

In News: Government takes decision to enable the direct listing of listed and unlisted companies on overseas exchanges at the IFSC (International Financial Services Centre).

Key Points:

• With this direct listing of securities by Indian public companies (both listed and unlisted) would be permissible in foreign jurisdictions.

Side Note:

• An unlisted public company and private companies can issue shares under Private Placement offer.
• Being a public limited company means that it offers shares to the general public and has limited liability. Its stock can be acquired by anyone, either privately or on a listing exchange.

• This is likely to enable start-ups and companies of like nature to access the global market through GIFT IFSC.
• This will also facilitate access to global capital and result in better valuation for Indian companies.

Present setup:

• At present, Indian companies can access overseas equity markets only through depository receipts or by listing their debt securities on foreign markets.
• In 2020, the Centre amended the Companies Act, allowing the direct listing of Indian companies on foreign stock exchanges, but the framework has not been put in place so far.

SEBI update:

• Government is also set to consolidate the laws dealing with the securities market in the country into a single securities market code.
• Move will consolidate the three different laws — the SCRA (Securities Contracts Regulation Act) of 1956, the SEBI Act of 1992, and the Depositories Act of 1996 into a single act with an updated and rationalised set of provisions.