India considering to allow local firms to directly list of London Stock Exchange
Under the current rules, no Indian local firms can directly list on foreign exchanges
As per latest reports, India might potentially reconsider bringing certain changes to the current rules and regulations regarding listing of local firms directly in foreign exchanges, through which the local firms will be able to directly list themselves on foreign exchanges. This is contrary to the current regulations, under which firms are not allowed to directly list themselves and can only do so through depository receipts.
The proposal to allow Indian firms to list themselves directly on foreign exchanges was initially introduced in 2020 but was deferred due to concerns regarding tax loses and opposition from a segment of the ruling party. The opposing faction was apprehensive about reduced Indian regulatory oversight for domestic firms listing abroad.
Nirmala Sitharaman made these comments during a joint press conference with British Finance Minister Jeremy Hunt after bilateral discussions on the sidelines of the G20 summit. We are particularly pleased to make a big step forward to make a first confirmation by India that it will explore the London Stock Exchange as an international destination for the direct listing of Indian companies,” Hunt said.
It was reported in 2020 by Reuters that London Stock Exchange had been in discussions with several Indian technology firms, however, this plan was put on hold by the Indian government. Later, in July, India announced its decision to allow companies to list on exchanges registered in the International Financial Services Centre (IFSC). This financial hub was created to provide companies with easier access to international foreign capital markets.
“We have mentioned earlier once that we are looking at listing, commencing with the IFSC, so once that is done, we may look at moving further (with overseas listing),” Nirmala Sitharaman said. “So at this stage, we have said that we are looking at listing in IFSC first,” she added.
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