nirmala sitharaman: Govt allows direct listing by Indian cos on foreign exchanges; what does it mean for India Inc?

MUMBAI – The federal government’s choice to permit Indian corporations to go for direct itemizing on overseas exchanges in addition to on the Worldwide Monetary Service Centre (IFSC) has been lauded by market experts, as they consider it will appeal to investments and progress capital.

Whereas talking on the launch occasion of AMC Repo Clearing and a company debt market improvement fund on Friday, Finance Minister Nirmala Sitharaman made the announcement.

“A direct itemizing of securities by home corporations will now be permissible in overseas jurisdictions…This can facilitate entry to world capital and higher valuation,” Sitharmanan stated.

Globally, and significantly within the US, among the Indian companies are getting significantly better valuation and have a a lot wider investor base in comparison with India, stated Amisha Vora, Chairperson and MD, Prabhudas Lilladher.

“Contemplating the truth that the Indian financial system is on an upswing now, it should assist appeal to extra investments into India and permit Indian corporations to draw extra progress capital. Additionally, the choice can have nice potential to spice up the Indian startup business,” Vora stated.

Sitharaman has urged monetary market regulators to deal with the standard, proportionality and the effectiveness of their choices in order that corporations discover additional ease in doing their enterprise.

Not solely will corporations have a wider investor participation and entry to overseas capital, however this may even supply them a aggressive platform. “Abroad itemizing will improve Indian corporations’ competitiveness with higher capital entry, broader traders base, improved valuations, and world model increase,” stated Aryaman Vir, CEO, Aurum WiseX.

Indian corporations ought to put together to grab this chance and solidify their place within the world market, Vir added. Sharing a thought much like that of Vir, Sriram BKR of Geojit Monetary Providers added that it’ll additionally enhance disclosures by corporations.

“Since International itemizing comes with higher disclosure duties, it in flip advantages all traders,” Sriram BKR, senior funding strategist at Geojit Monetary stated.

It additionally provides room for adopting worldwide finest practices on itemizing guidelines, data disclosures, investor interplay norms, and so on, he stated.

(Disclaimer: Suggestions, options, views and opinions given by the consultants are their very own. These don’t characterize the views of Financial Occasions)