29th July 2023 (7 Topics)
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Indian firms can now directly list on IFSC exchanges
Context
India companies can list their shares directly on foreign exchanges at the International Financial Services Centre (IFSC) in Gujarat International Financial Tech (GIFT) City in Gujarat.
What is GIFT City?
- The Gujarat International Finance Tec-City (GIFT City), the first and only IFSC currently operational in India, was established in 2015.
- GIFT City is India’s first operational smart city and International Financial Services Centre is an emerging global financial and IT services hub, a first of its kind in India, designed to be at or above par with globally benchmarked business districts.
- It is the only green-field smart city in India set up as a multi-service special economic zone (SEZ) and is regulated by the IFSC Authority (IFSCA).
- It is both a conduit and a destination for foreign direct investment (FDI).
- The IFSCA oversees all financial institutions, ahead of bodies such as the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).
Significance of the move
- At present, Indian companies are allowed to list in overseas markets through the American Depository Receipt (ADR) and Global Depository Receipt (GDR) routes. Once the listing of Indian companies on IFSC exchanges is cleared, listing of these entities on foreign bourses could follow.
- The move will give domestic firms access to foreign funds.
- This will also facilitate access to global capital and result in better valuation of the Indian companies.
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