New Delhi. In an important step, the government has allowed Indian companies to be listed in foreign stock exchanges with certain conditions. The Ministry of Corporate Affairs has notified the relevant section under the Company Act in this regard.
Currently, local companies are listed abroad through American Depository Receipts (ADRs) and Global Depository Receipts (GDRs). According to the notification issued by the Ministry on 30th October, in exercise of the powers conferred by sub-section (2) of section 1 of the Companies (Amendment) Act 2020 (29 of 2020), the Central Government hereby, on the 30th day of October 2023, Determines as the date from which the provisions of section 5 of the said Act shall come into force.'
The rules for direct listing of Indian companies on foreign stock exchanges are yet to be notified. Section five allows certain classes of public companies to list their securities on permitted stock exchanges in foreign jurisdictions or under such other jurisdictions.
It is noteworthy that on October 13, a senior government official had said that the ministry is considering various aspects, including possible eligibility criteria, to formulate rules for direct listing of companies on foreign stock exchanges.
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