Indian govt to release draft report on new overseas listing norms

The ministry of corporate affairs is close to releasing a draft report that will pave the way for Indian companies to list their shares in overseas markets without listing in India first, two regulatory officials aware of the matter said.

The ministry will propose changes to the Foreign Exchange Management Act (FEMA), the Income Tax Act, and the Companies Act, the officials said on condition of anonymity. These will include amendments on taxing share transfers in India and adding enabling provisions under the Companies Act 2013 to allow listing of certain classes of securities on stock exchanges in permissible foreign jurisdictions. The proposal was cleared by the Union cabinet in March.

“FEMA would be amended to include a category of ‘permissible investors’ from select jurisdictions. These companies will also be governed by the rules of the jurisdiction in which they are listed,” said one of the two persons, both of whom spoke on condition of anonymity.

After the cabinet green-lighted the proposal in March, finance minister Nirmala Sitharaman reiterated the policy intent in May, on the last of a five-day series of announcements on the 20 trillion financial package to ease hardships caused by the coronavirus outbreak.

“Overseas listing of shares will likely provide Indian companies with an alternate route to access capital and will also bring exposure to a broader and likely more global investor base. Such listing will facilitate comparisons with global listed peers and may lead to accurate benchmarking and higher valuations. Some of the successful startups in the technology and internet sector, including companies commonly referred as unicorns, which may still not be profitable, maybe able to access larger pools of capital from overseas markets in developed economies,” said Yash Ashar, partner and head of capital markets, Cyril Amarchand Mangaldas.

FEMA, at present, does not contemplate a company incorporated in India and listed on a foreign stock exchange selling shares to a person resident outside India. The Companies Act 2013 has rules for public offers and private placements of securities applicable to all companies incorporated in India, including companies that issue ADRs/GDRs, and those that would propose to list their equity shares on foreign stock exchanges.

The ministry is also in favour of allowing listing in certain key permissible jurisdictions.

This article was first published on livemint.com.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.