Government amends SCRR to facilitate direct listing of Indian companies on international exchanges in GIFT IFSC
Aug 29, 2024
New Delhi [India], August 29 : The Department of Economic Affairs under the Ministry of Finance has amended the Securities Contracts Regulation Rules (SCRR), 1956.
According to the Ministry of Finance, the amendments are designed to streamline the listing requirements for Indian companies looking to list their securities on international exchanges within International Financial Service Centres (IFSCs), notably at Gujarat International Finance Tech-City (GIFT City) City in Gujarat.
These changes are expected to provide Indian companies, particularly in the start-up, sunrise, and technology sectors, with easier access to global capital markets.
The newly introduced amendments are part of the government's broader initiative to align India's financial regulations with global standards, facilitating the direct listing of equity shares by public Indian companies on international exchanges.
Under the 'Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme,' which operates in tandem with the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, and the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024, an overarching regulatory framework has been established. This framework enables Indian companies to issue and list their shares on permitted international stock exchanges within the GIFT IFSC.
Indian companies aiming for an exclusive listing on international exchanges within IFSCs must ensure that at least 10 per cent of the post-issue capital is offered and allotted to the public as per the offer document.
The continuous listing requirement for these companies is also set at 10 per cent, in accordance with Rules 19(2)(b) and 19A of the SCRR. This ensures that the companies maintain a certain level of public float, consistent with international best practices.
By reducing the thresholds for public offers and continuous listing requirements, the amendments lower the barriers for Indian companies, particularly start-ups and those in emerging sectors, to access global capital. These changes are poised to benefit Indian firms with global ambitions, enabling them to expand their market presence and tap into new opportunities abroad.
