oth listed and unlisted Indian companies can list their shares directly on foreign exchanges at the International Financial Services Centre in Gujarat International Financial Tech (GIFT) City in Gujarat, , a move that will give domestic firms access to foreign funds. This will also facilitate access to global capital and result in better valuation of the Indian companies.
Companies can now register on IFSC exchanges even if they are not listed on any of the exchanges in the country.
The move comes amid demand from industry that Indian companies be allowed to list directly abroad. In May 2020, the government had allowed direct listing of securities by Indian public companies in foreign jurisdictions but no law or framework was drawn to take the move forward for almost three years.
Earlier this month, SGX Nifty was rebranded as GIFT Nifty and trading shifted to NSE IX from SGX, Singapore.
The GIFT IFSC in Gujarat has triggered reverse flipping, and now countries like Singapore and Mauritius are asking private equity (PE) investors what needs to be done to stop them from moving to GIFT IFSC.
On July 25, GIFT Nifty derivatives on NSE International Exchange (NSE IX) reported record single-day trading of more than 3,14,900 contracts with a turnover of $12.39 billion. Traded contract volume and turnover value witnessed a growth of over 838 percent and 924 percent, respectively, compared to the first day full-scale operations volume of 33,570 contracts and a turnover of US $1.21 billion.
Trading turnover on NSE IX has been growing exponentially since the commencement of the full-scale operation of NSE IX-SGX GIFT Connect on July 3, the exchange said. Since the first day of full-scale operations of the Connect, Gift Nifty has witnessed a cumulative volume of 11,09,115 contracts with a turnover of $42.89 billion.
Located on the banks of Sabarmati River, between Ahmedabad and Gandhinagar, GIFT City currently spans an integrated development area of 3.6 sq km. Plans are afoot to develop 5.76 sq km of built-up area comprising commercial zone (67%), residential area (22%) and social space (11%).
Initially developed under the Special Economic Zones Act of 2005, GIFT City was allowed to host the country’s first IFSC in 2019. The city’s commercial activities are under two distinctive zones – the GIFT SEZ (the non-IFSC area) and the GIFT IFSC.
The latter became operational in 2020 after a bunch of favourable policy measures came into force, turning it into the new epicentre of AIFs and fintechs keen to tap into offshore markets without leaving Indian shores.
While GIFT IFSC makes it easier for foreign funds to directly enter the India market without using any pooled or feeder funds, Pai, founding partner of 3One4 Capital, the IFSC has also made it easier for PEs to invest in overseas market without using any SPVs.
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