The Ministry of Corporate Affairs along with the Departments of Economic Affairs is in advanced stages of formulating the eligibility criteria for Indian companies to list directly on foreign stock exchanges.

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MCA sources told CNBC TV-18 that there would be a checklist for companies to avail the direct listing facility. A senior MCA official said that the criteria for direct listing could include the minimum period of operations for a company in India. Many other such proposals are on the list but no decision has been taken yet.

“There will be a minimum eligibility for companies to avail the direct listing facility. We are working on the rules. The company can’t be born yesterday and look to list tomorrow. There would be a minimum time of operation a company would need before it looks to list abroad,” said an MCA official.

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MCA officials also told CNBC TV-18 that adherence to corporate governance standards is not being stipulated for the overseas listing of companies. “Minimum governance standards for large unlisted companies are being deliberated by the company law committee but not in the direct listing rules,” a senior MCA official said.

The consultations between MCA and DEA are in advanced stages, but no specific timelines has been set for the release of the rules.

The proposed framework is in works to implement direct listing of Indian equities in international stock exchanges abroad. Such listing is already allowed according to the Companies Act 2013. The act was amended in 2020 to allow the direct listing of Indian companies on foreign stock exchanges. However, the framework to do so has not been formulated yet. Currently, Indian companies can access overseas equity markets by listing their debt securities or through depository receipts.

The government is currently looking to enable direct listing of Indian companies in GiftCity before allowing them to list directly overseas. MCA officials say that centre is looking to facilitate the direct listing in a phased manner.

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(Edited by : Asmita Pant)

First Published:Oct 16, 2023 6:11 AM IST