Key Recommendations:
- Unlisted Indian companies should be allowed to do direct equity listing in select overseas markets.
- Companies from select overseas jurisdictions should also be allowed to list their shares on Indian bourses.
- The SEBI panel only chose those jurisdictions as ‘Permissible Jurisdictions’ – where unlisted Indian companies can do a direct equity listing – that are part of the International Organization of Securities Commissions (IOSCO) board and not just ordinary members of the global body.
Significance of recommendations:
- The recommendations are significant as current regulations bar unlisted Indian companies to list their shares overseas, though such entities could list their depository receipts.
- Also, overseas companies can currently list here only by way of issuing Indian Depository Receipts (IDRs), a framework that has proved to be a non-starter.
- to the SEBI panel, such listing, if allowed, would benefit companies in the form of alternative source of capital, broader investor base and better valuation.
- And by allowing overseas companies to list in India, Indian investors could benefit from enhanced diversification of portfolios and participation in the wealth created by global companies.
- The recommendations are essential to make India a player in the global securities market.
