Indian Companies Go Global: Direct Listings on International Markets

Traditionally, Indian companies used depository receipts (ADRs or GDRs) to gain access to international markets. However, a significant shift is occurring, with Indian businesses now gaining the ability to list shares directly on international markets, particularly through the International Financial Services Centre (IFSC) at GIFT City.

This ground-breaking move provides Indian firms with unprecedented opportunities to raise capital globally, increasing their international visibility and growth.

 Companies can either issue new capital or offer existing shares while adhering to the LEAP and NDI rules. Certain sectors are restricted, and companies must meet eligibility criteria to ensure compliance.

 Both the LEAP Rules and the NDI Rules outline criteria for companies that are ineligible for direct listing. Provisions include excluding companies with a negative net worth or those under investigation, ensuring a strong framework for market integrity.

 Permissible holders, primarily Persons Resident Outside India (PROIs), can invest up to the limits set for foreign portfolio investors. Sectoral caps determine investment thresholds, while automatic and government routes define entry requirements.

 Pricing mechanisms ensure fair market value, and after listing, companies must follow IFSC regulations, such as financial statement compliance and tax breaks available to permissible holders.

 While direct listing does not change an unlisted public company's status under Indian regulations, compliance with IFSC Regulations is required after listing, increasing transparency and investor confidence.

 By capitalizing on this opportunity strategically Indian companies can unlock growth potential and competitiveness at the global level.