Direct Listing of Public Indian Companies

Published on 15 Apr 2025

•  The Union government recently permitted the direct listing of securities by Indian companies on international exchanges of GIFT IFSC.
• A company looking to raise interest-free capital from the public by listing its shares has two options—an IPO or a direct listing.
• Direct listing is the process by which companies sell their shares to the public without using an intermediary, like an underwriter, but through a stock exchange. 
•  On the other hand in IPO, the company creates new shares and sells it with the help of an underwriter who charges a commission.
• Earlier domestic listed companies used American Depository Receipts (ADR) or Global Depository Receipts (GDR) to list in the overseas market and access capital.
• The union government amended the Companies (Amendment) Act, 2020 and provisions were included in the Companies Act, 2013, to allow direct listing of Indian companies in the GIFT-IFSC and other foreign stock exchanges. This will help Indian companies, particularly startups, access capital, outside the domestic exchanges.
• A depositary receipt (DR) is a negotiable certificate issued by a bank.

Keywords:

Direct Listing PSU Investment Stock market Financial market Investment models