The International Financial Services Centre (IFSC), located within the Gujarat International Financial Tech City (GIFT City), allows both listed and unlisted companies to list their shares. GIFT City is Prime Minister Narendra Modi's flagship project.
New Delhi: Finance Minister Nirmala Sitharaman announced on Friday that the government has given its approval for Indian firms to be listed on exchanges operating within a newly established financial hub in Gujarat. The main objective behind this decision is to provide these companies with easier and more cost-effective access to foreign capital.
The financial hub, known as the International Financial Services Centre (IFSC), is located within the Gujarat International Financial Tech City (GIFT), which holds the distinction of being Prime Minister Narendra Modi’s flagship project.
In her statement, Finance Minister Sitharaman expressed her satisfaction with the government’s decision to enable direct listing of both listed and unlisted companies on the IFSC exchanges.
The GIFT-IFSC is designed as a tax-neutral financial center and aims to compete with other global financial hubs, such as Singapore. It offers attractive fiscal incentives and a favorable regulatory environment for businesses to operate within.
A recent notable development in this context was the relocation of the SGX Nifty from the Singapore Exchange’s (SGX) platform to the NSE’s International Exchange (NSE IX) in GIFT City.
Within the IFSC, there are two stock exchanges, in addition to a commodity bourse and a bullion exchange, providing a comprehensive range of financial services.
As of now, Indian companies can only be listed on foreign exchanges through instruments like depository receipts.
It’s worth mentioning that in 2020, the government had initially planned to allow firms to have their primary listings on foreign exchanges. However, due to opposition from nationalist groups, including the Swadeshi Jagran Manch, the economic wing of the RSS, New Delhi had temporarily suspended these plans, opting instead to focus on strengthening its domestic capital markets.
With this new development, companies can now explore the IFSC route to enjoy similar benefits associated with foreign capital. This move is expected to create greater opportunities for Indian businesses to access international investments and enhance their growth prospects.
