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Direct Listing of Indian Companies on International Exchanges: Government amends FEM (Non-Debt Instruments) Rules, 2019


In a landmark announcement by the Union Finance Ministry, public Indian companies have been granted permission to directly list their securities on the international exchanges of Gujarat International Finance Tec-City’s International Financial Services Centre (‘GIFT IFSC’)[i]. This progressive move, part of a broader financial reform agenda, aims to foster foreign investment, unlock growth opportunities, and expand the investor base for Indian companies. Announced by the Union Minister for Finance and Corporate Affairs, this initiative marks a strategic step in reshaping the Indian capital market landscape, offering significant opportunities for companies seeking global expansion.


GIFT IFSC is India’s first international financial hub, connecting the country with global opportunities. It allows global capital to flow easily into India and helps the Indian economy link with the global financial system. To support GIFT IFSC’s growth, the IFSC Authority has made important efforts to create a flexible and high-quality regulatory and business environment in the hub, accelerating sustainable global capital flows.

Regulatory Amendments

The regulatory landscape for direct listing of Indian companies on international exchanges is shaped by the Foreign Exchange Management (Non-Debt Instruments) Amendment Rules, 2024[ii] (‘FEM NDI Amendment Rules’), and the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024[iii]. These amendments together create a framework that empowers unlisted public Indian companies to list their shares on international platforms like the India International Exchange and NSE International Exchange at GIFT IFSC. The Securities and Exchange Board of India (‘SEBI’) is actively working on operational guidelines for these listed entities, ensuring robust regulatory supervision by the IFSC Authority. This combined framework signifies a significant evolution in the regulatory mechanisms governing Indian companies’ access to global capital markets.

FEM NDI Amendment Rules: Highlights

According to the FEM NDI Amendment Rules, an International Exchange is a permitted stock exchange in a permissible jurisdiction, which is a jurisdiction notified by the Central Government under the Prevention of Money Laundering Rules. A listed Indian company is defined to be a company whose equity or debt is listed on a recognized stock exchange in India or an International Exchange. Further, a permissible holder is defined to be a holder of equity shares listed on an International Exchange, excluding persons resident in India. A holder from a country sharing a land border with India needs prior approval from the Central Government.

The amendments also add a new chapter and a new schedule to the rules, which specify the conditions for the issue and listing of equity shares on International Exchanges, the eligibility criteria for the companies and the shareholders, the obligations of the companies regarding compliance with laws and regulations, the voting rights of the permissible holders, and the pricing mechanism for the equity shares. The framework also specifies conditions rendering companies ineligible for listing, such as negative net worth or legal disputes. Additionally, the rules stress the importance of alignment with existing financial laws and emphasize the need for companies to be compliant and financially stable.

Historical Context

The historical roots of this policy can be traced back to the Companies (Amendment) Act, 2020, which significantly revised the Companies Act, 2013. These amendments were crucial in laying the groundwork for the direct listing of certain classes of securities by specific public companies incorporated in India. This legislative change opened the door for these companies to list their securities on approved stock exchanges in permissible foreign jurisdictions, setting the stage for the current policy initiative that further expands the scope and reach of Indian companies in global markets.

Implications and Opportunities

This initiative significantly impacts the Indian market by offering new avenues for capital raising in both INR and foreign currencies. It is set to revolutionize the Indian capital market by aligning company valuations with global standards, thereby boosting foreign investment, and fostering growth opportunities. This will be particularly advantageous for startups and tech-sector companies, providing them with the flexibility to access both domestic and international markets for capital-raising. Such opportunities at GIFT IFSC are expected to be beneficial for companies aiming for global expansion and tapping into foreign markets.

Boosting the Capital Market Ecosystem

This initiative is set to significantly enhance the capital market ecosystem at GIFT IFSC. It is not just a strategic move for individual companies but also a major step in boosting the overall financial market. This policy is expected to introduce new investment opportunities, diversify financial products, and increase liquidity within GIFT IFSC, perfectly aligning with its broader vision to become a global financial hub.


The decision for direct listing of Indian companies’ securities on GIFT IFSC’s international exchanges marks a transformative phase for India’s financial markets. This policy reflects the government’s dedication to cultivating a business-friendly environment, drawing foreign investment, and stimulating economic growth. The anticipation of operational guidelines from SEBI, coupled with companies’ readiness to embrace this opportunity, heralds a new era of heightened global engagement for Indian enterprises. This initiative not only propels individual company growth but also cements GIFT IFSC’s role as a prominent global financial hub.

End Notes:

[i] PIB Delhi, Government allows direct listing of securities by public Indian companies on International Exchanges of GIFT IFSC (2024).

[ii] Notification No. S.O. 332(E), dated 24.01.2024.

[iii] Notification No. G.S.R. 61(E), dated 24.01.2024.

Authored by Nitish Solanki, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.


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