Indian startups will be listed on foreign exchange directly in 2024

Indian startups will be listed on foreign exchange

Finance Minister Nirmala Sitharaman announced that domestic Indian startups are going to be allowed to list on the foreign exchange directly. Plus, they can list directly at the International Financial Services Center, or IFSC, in Ahmedabad.

This new policy focuses on providing Indian startups with easy access to foreign funds on different exchanges overseas.

Decisions taken during an SEBI event 

An event was organized by SEBI, which is the capital markets regulator. During this event, Finance Minister Nirmala Sitharaman said, ‘The government has decided to allow direct listing of listed as well as unlisted companies on the International Financial Services Centre exchanges.

Also, she described this move as a very important step. Sitharaman also emphasized that this step will help facilitate global capital access. Plus, it will help achieve better valuations.

According to a senior representative from the Ministry of Finance, the government is going to announce the rules related to this policy in the next few weeks for Indian startups. To initiate with, Indian startups are going to be permitted to list at the International Financial Services Centre, which is located in GIFT City, Ahmedabad.

Also, the official noted that Indian startups will be permitted to list in eight to nine designated foreign jurisdictions.

Other benefits of this new policy for Indian startups 

The new policy allowing direct overseas listings can also offer a major boost to unicorns or startups, which are valued at more than $1 billion. Also, it can help the digital unit of the conglomerate Reliance. It has been eyeing a US listing after raising more than $2 billion from various investors, such as Google, Facebook, and even KKR.

A senior finance ministry official also gave a reference to past occurrences of Indian startups that have been looking for foreign listings. It emphasized that this move is going to offer an alternative option for various investors. Also, it will help in widening the scope for Indian startups when it comes to global markets.

At present, various domestically listed entities of the country can list overseas through instruments like American Depository Receipts, or ADRs, as well as Global Depository Receipts, or GDRs. They will allow foreign investors to own as well as trade shares of foreign companies in the markets.

This new policy of direct overseas listing is going to provide a great alternative route for companies to have access to foreign capital. Also, it will allow Indian startups to attract a massive pool of capital while improving corporate governance. Plus, there are going to be benefits from dollar-denominated trades that will allow investors to save on hedging as well as currency conversion costs.