After GIFT City, the government has allowed India companies to list directly on foreign exchanges in a move that has been in the works for several years.
The harder part will be convincing the revenue department to support the amendments to the Companies Act that would allow direct overseas listing. While some other steps, like notification under Fema, will need to be taken, CBDT's refusal to make the necessary changes regarding capital gains tax has made the amendments unworkable. As of right now, October 30 was the date that the notification under the Companies Act was supposed to be sent, according to the Ministry of Corporate Affairs.
Many businesses and market participants say that following the initial rush, the government changed its mind and was hesitant to permit international listings because it preferred that they handle internal issues first. In any event, some in the investment banking community believe that, although some brands are well-known in India, they won't have much momentum, say, in the US, and that Indian entities have more recognition and coverage in those countries.
At the moment, depository receipts are used for foreign listings of locally listed companies. A few Indian businesses have also moved on with SPAC (special purpose acquisition companies) transactions. Indian businesses have favoured local listing due to the market volatility during the last 18 months or so.