Indian Companies Can Go For Overseas Listing, Says Nirmala SitharamanThe approval came after three years of announcement as part of the Covid relief package, which will enable domestic companies to access foreign funds by listing their shares on various exchanges overseas

Finance Minister Nirmala Sitharaman on Friday said Indian companies can now go in for direct listing on overseas foreign exchanges as well as on the International Financial Services Centre (IFSC) bourse in Ahmedabad.

The minister made the announcement about the direct overseas listing of domestic companies while speaking at an event to launch a corporate debt market development fund, which is a bailout facility for debt funds.

The approval came after three years of announcement as part of the Covid relief package, which will enable domestic companies to access foreign funds by listing their shares on various exchanges overseas. A proposal regarding this was first floated as part of the liquidity package announced during the pandemic in May 2020.

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 the direct listing of listed and unlisted companies on the IFSC exchanges. So, this is a major step forward. This will facilitate access to global capital and better valuation," said the minister in a statement.

As per reports, a senior government official said the rules for direct overseas listing of Indian companies will be notified in a few weeks.

The bailout facility will act as a backstop facility for specified debt funds during periods of stress in debt markets, and this was announced by Sebi last month. Its function will involve purchasing investment-grade corporate debt securities when debt markets face a crisis.

Currently, overseas listings by domestically listed entities are carried out through American Depository Receipts (ADRs) and Global Depository Receipts (GDRs), which companies like Infosys and Wipro have done.

The new policy could be a shot in the arm for unicorns or startups valued at more than $1 billion, and the digital unit of conglomerate Reliance, which is eyeing a US listing after raising more than $20 billion from investors, such as KKR, Google and Facebook, among others.

The Securities and Exchange Board of India (Sebi) had previously recommended a framework within which such direct listing will be facilitated, and it is expected that the Sebi framework will be the basis for future regulation in this area.

(With inputs from PTI)