The Indian government’s recent decision to permit Indian companies to directly list their securities on foreign exchanges and the International Financial Service Centre (IFSC) has elicited widespread praise from market experts. Finance Minister Nirmala Sitharaman, while speaking at the launch event of AMC Repo Clearing and a corporate debt market development fund, announced that this move aims to facilitate access to global capital and improve valuation for India Inc.
The new directive holds significant implications for the Indian business landscape, as it promises to attract substantial investments and growth capital. Several market mavens have pointed out that Indian businesses, especially those operating in the US, often receive more favorable valuations and enjoy a broader investor base compared to their domestic counterparts.
Amisha Vora, Chairperson and Managing Director of Prabhudas Lilladher, expressed confidence that the current upswing in the Indian economy will further enhance its appeal to international investors. The ability of Indian companies to pursue direct listings on foreign exchanges is expected to augment their competitiveness, fueling growth and expansion. In particular, the decision is believed to hold great potential for bolstering the Indian startup industry.
Aryaman Vir, CEO of Aurum WiseX, echoed Vora’s sentiments, emphasizing that overseas listings would grant Indian companies greater access to capital, broader investor participation, and improved valuations, ultimately elevating their global brand recognition. This newfound competitive edge is poised to help Indian businesses consolidate their position in the international market.
The benefits of foreign listings extend beyond capital access and valuation improvement. Sriram BKR, Senior Investment Strategist at Geojit Financial Services, highlighted that such listings come with enhanced disclosure responsibilities. As a result, investors will be better informed, fostering increased transparency and trust in Indian companies. Moreover, the move provides an opportunity for Indian firms to adopt international best practices in terms of listing rules, information disclosures, and investor interaction norms.
Minister Sitharaman also urged financial market regulators to prioritize the quality, proportionality, and effectiveness of their decisions, aiming to further streamline business operations for companies. By encouraging better ease of doing business, the government seeks to create an environment conducive to sustained economic growth.
The announcement has been met with enthusiasm from both domestic and international investors. Foreign direct listings are expected to strengthen India’s position as an attractive investment destination and align it with global market standards. The move is a testament to the government’s commitment to promoting economic growth and increasing India Inc.’s global footprint.
In conclusion, the Indian government’s decision to allow direct listings by domestic companies on foreign exchanges and the IFSC represents a significant step towards facilitating global capital access and growth. By embracing this opportunity, Indian businesses can harness the potential to scale new heights, attract substantial investments, and compete on the international stage. The move is anticipated to bring lasting benefits to India Inc. and further solidify its position as a key player in the global economy.
