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In a significant move aimed at globalizing Indian businesses, the Ministry of Corporate Affairs (MCA) has recently issued a groundbreaking notification, effective as of October 30, 2023.
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This notification allows specific categories of Indian public companies to issue securities with the intention of being listed on foreign stock exchanges in approved foreign jurisdictions.
This development is a result of amendments to sections of the Companies Act, which were initially proposed in September 2020.
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The amendment grants specific classes of public companies the authority to issue securities for listing on foreign stock exchanges in permissible foreign jurisdictions.
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The central government will determine which public company classes qualify for this privilege and can exempt them from certain provisions.
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This change eliminates the current necessity for Indian companies to acquire Global Depository Receipts (GDR) to access foreign exchanges.
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The MCA is expected to issue further rules and regulations to operationalize this significant development.
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As Nitesh Mehta, Partner, M&A Tax at BDO India, highlighted, the government will need to specify the foreign jurisdictions where such listings will be permitted and establish any additional rules and conditions.
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This move marks a significant step towards making Indian companies more globally accessible and competitive in the international market.
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