NSE GIFT City to Introduce India's First Foreign Currency Equity Listing

India is set to take a significant leap in its financial market integration with global systems as NSE International Exchange (NSE IX), operating from Gujarat International Finance Tec-City (GIFT City), prepares to roll out the country’s first equity listings denominated in a foreign currency. This initiative, expected within the current quarter, is seen as a key step toward positioning India as a major player in the international financial ecosystem.

Targeting Global-Oriented Firms with Unlisted Equity Offerings

The initial phase of this path-breaking move will focus on unlisted companies, including Indian firms with foreign ownership and overseas-based entities from prominent global regions such as Silicon Valley and Delaware. V. Balasubramaniam, CEO of NSE IX, stated that 5 to 6 companies are currently preparing for their listings, although the names are yet to be revealed. The platform will serve as an alternative to domestic exchanges, targeting companies with aspirations of global reach.

This listing initiative aligns with the broader ambition of GIFT City, backed by Prime Minister Narendra Modi, to transform the region into a global financial centre akin to Dubai or Hong Kong. The International Financial Services Centre (IFSC) status of GIFT City provides significant incentives such as tax exemptions and liberal regulatory norms that make it attractive for foreign currency-based capital raising.

Boosting India’s Cross-Border Capital Raising Capabilities

For Indian companies expanding abroad, the foreign currency listing mechanism at GIFT City is expected to reduce currency conversion and hedging costs, offering a more streamlined and cost-efficient process. This initiative not only aids companies in tapping into global capital but does so while keeping them within India’s regulatory framework.

NSE IX is working closely with the Securities and Exchange Board of India (SEBI) and the International Financial Services Centres Authority (IFSCA) to resolve pending regulatory requirements. Once finalised, already-listed Indian companies may also raise funds through follow-on public offerings (FPOs) or offers for sale (OFS) in foreign currencies such as the US dollar.

Another key attraction for global investors is the absence of securities transaction tax (STT) and capital gains tax on the platform, making it a highly favourable destination. Historically, Indian firms have raised over $20 billion in IPOs globally through instruments like American Depository Receipts (ADRs), but the NSE IX platform could soon offer an equivalent option from Indian soil.

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Conclusion

By enabling foreign currency listings from GIFT City, NSE IX is setting the stage for a transformative shift in India’s capital markets. This move will not only elevate GIFT City’s international stature but also empower Indian companies to raise global funds without leaving Indian jurisdiction marking a new era of financial innovation and cross-border accessibility.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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