A LANDMARK DECISION

The decision to allow domestic companies to directly list on foreign exchanges is a bold move that will help India attract more foreign investment and boost its economy

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In a historic and groundbreaking development, India’s Finance Minister, Nirmala Sitharaman, recently announced the government’s decision to allow the domestic or Indian companies to directly list on foreign stock exchanges.

This move comes as part of the government’s efforts to boost investment opportunities, enhance capital flows, and position India as an attractive destination for global investors. By removing the barriers and complexities associated with the traditional Initial Public Offering (IPO) process, this new policy aims to revolutionize the Indian capital market landscape.

Currently, Indian companies can only list on foreign exchanges through American Depository Receipts (ADRs) or Global Depository Receipts (GDRs). ADRs and GDRs are securities that represent ownership of shares in a foreign company. They are traded on foreign exchanges, but they are backed by the underlying shares in the foreign company.

The new rules will allow Indian companies to list their shares directly on foreign exchanges. This means that they will not need to issue ADRs or GDRs, making it easier for Indian companies to raise capital from foreign investors.

INDIA’S GROWTH DILEMMA

India is at the centre of attraction in the world, which is troubled, particularly by China’s decreasing influence both from the economic and geopolitical point of views.

Everyone is eying India and its growth prospects in the long run. The political stability, strong reforms, stable currency, and huge benefit of its demographic dividends are now playing a key role. However, present government has an equally hard task to sustain and facilitate this growth. Growth requires capital that too at the front end of the cycle. India is still nascent with aspirations to be a big and developed market in the world.