Mumbai: The Union government has decided to let Indian companies list directly on stock exchanges abroad and in Gujarat’s International Financial Services Centre (IFSC), finance minister Nirmala Sitharaman said on Friday.
Currently, Indian companies can raise money abroad through American Depository Receipts (ADR) and Global Depository Receipts (GDR). The government first announced the foreign listing plan in 2020 as part of a pandemic relief package, and the move has been finalized now.
“A direct listing of securities by domestic companies will now be permissible in foreign jurisdictions,” Sitharaman said. “I am also pleased to announce that the government has taken a decision to enable the direct listing of listed and unlisted companies on the IFSC exchange. So, this is a major step forward. This will facilitate access to global capital and better valuation.”
The minister spoke in Mumbai at the launch of AMC repo clearing and a corporate debt market development fund (CDMDF) to help deepen the corporate bond market. The ₹33,000 crore fund, created by pooling money from mutual funds’ debt schemes, aims to provide liquidity to debt schemes during periods of market stress.
The AMC Repo Clearing Ltd (ARCL), on the other hand, is a limited-purpose clearing corporation backed by Sebi and funded by asset management companies. It will offer clearing and settlement services to all trades executed on the NSE and BSE under tri-party repo in corporate debt securities. Under the tri-party repo, a licensed financial institution facilitates a repo transaction between two parties, wherein one borrows against corporate bonds as collateral.
The platform will help all regulated entities—AMCs, insurance companies, market makers, and short-term traders—take positions and manage their risks in listed corporate bonds and debentures, commercial papers, and certificates of deposit.
Further, Sitharaman said she asked financial market regulators to focus on quality, proportionality and effectiveness of regulations to make it easier for companies to do business.
Urging large municipal bodies to tap the debt market for funding needs, Sitharaman said the government has been and will continue to incentivize cities to improve their credit ratings so that they can price their bonds better.
Download The Mint News App to get Daily Market Updates.
More
Less
Updated: 29 Jul 2023, 12:30 AM IST
For all the latest world News Click Here
