Panel proposes direct listing of Indian cos on foreign bourses and vice versa

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A committee set up by the SEBI to look into the details of facilitating companies incorporated in India to directly list their equity shares on foreign stock exchanges and firms incorporated outside India to list on Indian bourses has submitted its report. The panel has proposed that SEBI must allow direct listing of Indian companies on overseas bourses and that of foreign firms on Indian exchanges. Currently, Indian companies can list their shares through depository receipts abroad, while foreign companies need to go through the Indian Depository Receipt route for listing of equities. Moreover, Indian firms can list their debt securities directly on international exchanges through a security instrument known as ‘Masala Bonds’.

The committee has recommended that the framework should allow listing only on specified stock exchanges in ‘Permissible Jurisdictions’. Permissible Jurisdiction includes a jurisdiction which has treaty obligations to share information and cooperate with Indian authorities in the event of any investigation. Equity listings by companies incorporated in India on foreign stock exchanges would allow them to access foreign capital at a lower cost. The Indian economy, in turn, will experience added growth and economic development.

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