DIRECT
LISTING OF FOREIGN EXCHANGES - ECONOMY
News:
Direct
listing abroad: Centre enforces key company law provision
What's
in the news?
● The
government recently permitted certain Indian companies to directly list on
select foreign stock exchanges, which will allow these companies to access
global capital and boost capital outflows.
Key
takeaways:
● The
provision was announced in the Companies
(Amendment) Bill, 2020, came into effect on October 30, 2023.
Benefits:
● Better valuation &
Global Exposure: It will offer them better valuation
and exposure to trade in foreign currency such as the dollar.
● Fundraising:
It may also benefit the startup and unicorn community as another avenue to
raise funds and increase their profile globally.
● Enhanced Foreign
Exchange: It
will also add to India’s foreign exchange kitty.
Concerns:
● Market
valuations of these listing by global investors.
● Uncertainty
of the commercial benefits of these listings.
● Volatility of foreign
exchange.