Indian companies will now be allowed to list in overseas markets without having to list in the Indian markets first, the government has said. The ministry of Finance said:
It has now been decided with the approval of the Union Finance Minister that unlisted companies may be allowed to raise capital abroad without the requirement of prior or subsequent listing in India.
The scheme will be implemented on a pilot basis for two years from the date of notification.
The move, to allow companies to list directly abroad, is being seen as part of a series of steps the government is taking to support the Rupee.
The government has set the following conditions to be met before such a listing:
- Unlisted companies may be allowed to list abroad only on exchanges in IOSCO/FATF compliant jurisdictions or those jurisdictions with which Sebi has signed bilateral agreements.
- The Companies shall file a copy of the return which they submit to the proposed exchange/regulators also to SEBI for the purpose of Prevention of Money Laundering Act (PMLA). They shall comply with Sebi’s disclosure requirements in addition to that of the primary exchange prior to the listing abroad.
- While raising resources abroad, the listing company shall be fully compliant with the FDI Policy in force.
- The capital raised abroad may be utilised for retiring outstanding overseas debt or for operations abroad including for acquisitions.
- In case the funds raised are not utilised abroad as stipulated above, such companies shall remit the money back to India within 15 days and such money shall be parked only in AD category banks recognised by RBI.
- Ministry of Finance (MoF), Department of Industrial Policy and Promotion (DIPP) and Reserve Bank of India (RBI) would be issuing the necessary notifications in due course in order to implement the required changes to the existing rules.