India lets firms list on Modi's flagship finance hub to draw foreign capital
NEW DELHI, July 29 (Reuters) - India has allowed its firms to list on exchanges registered in a new financial hub in the western state of Gujarat, Finance Minister Nirmala Sitharaman said on Friday, to give companies access to easier and cheaper foreign capital.
Listed and unlisted companies can list their shares in the International Financial Services Centre (IFSC) housed in the Gujarat International Financial Tech City (GIFT), which is Prime Minister Narendra Modi's flagship project.
"I'm pleased to announce that the government has taken a decision to enable direct listing of listed and unlisted companies on the IFSC exchanges," Sitharaman said.
GIFT-IFSC is a tax neutral financial center, which aims to compete with hubs like Singapore as it provides fiscal incentives and an easier regulatory environment to operate on.
Recently the SGX Nifty, which was previously traded on the Singapore Exchange's (SGX) (SGXL.SI) platform, moved to NSE's International Exchange (NSE IX) in GIFT City.
The IFSC houses two stock exchanges, one commodity bourse, and a bullion exchange.
Indian companies can currently only list on foreign exchanges through instruments such as depository receipts.
The government had announced plans in 2020 to allow firms to have their primary listings on foreign exchanges. But in the face of opposition from nationalist groups such as the Swadeshi Jagran Manch, the economic wing of the ideological parent of Modi’s ruling party, New Delhi had frozen such plans saying it will look to bolster its own capital markets.
The government has said companies can use the IFSC route to access similar benefits of foreign capital.
Reporting by Aftab Ahmed; Editing by Muralikumar Anantharaman
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Source: Reuters India
