NEW DELHI: The government has substantially eased overseas listing norms, a move intended to make more foreign funds available to growth-hungry enterprises and those wanting to make a turnaround with the infusion of cheaper capital compatible with their business plans.
It allowed companies with negative net worth, and unlisted firms operating in International Financial Services Centres (IFSCs) like Gujarat’s GIFT City to list their securities overseas. For companies that have completely eroded their networth, foreign listing will be subject to the condition that a minimum of 75% of the shares or other securities offered are allotted to large institutional investors.
According to a series of amendments to overseas listing framework notified by the Ministry of Corporate Affairs (MCA), companies can list convertible debentures and preference shares on overseas stock exchanges, in addition to equity shares, giving them more options to raise funds abroad.
“Provided that a company having a negative net worth shall be eligible to issue its equity instruments for listing, if the issuer undertakes to allot at least seventy-five per cent of the net offer to qualified institutional buyers…,” the MCA notification read.
Under the amended Companies (Listing of Equity Instruments in Permissible Jurisdictions) Rules, 2026, unlisted public companies operating in IFSCs can also list their securities overseas under the framework, provided they comply with IFSCA regulations.
The rules also make it easier for companies that have repaid overdue loans to banks and other lenders to list overseas by reducing the waiting period from two years to more than six months. However, companies that have not filed their annual returns or financial statements must clear these pending filings to avoid disqualification.
Experts said that the expansion from equity shares to equity instruments brings the MCA framework in line with the existing IFSCA Listing Regulations and gives companies more options to tap international capital markets.
“These amendments represent a progressive step towards liberalising India’s overseas listing regime and enhancing access to global capital. By broadening the range of eligible securities and easing certain eligibility conditions, the MCA has sought to facilitate more efficient and flexible fundraising opportunities for Indian companies while aligning the regulatory framework with international market practices,” said Anjali Malhotra, associate partner (regulatory) at Nangia Global.
She said allowing companies with negative net worth to list overseas, subject to the QIB allocation requirement, would help safeguard investors by ensuring institutional participation in the offering.
“The inclusion of instruments such as convertible debentures and preference shares, along with the relaxation of certain eligibility norms, will help create a more inclusive and practical fundraising framework. Overall, the move is expected to enhance the attractiveness of IFSCs, broaden funding opportunities for Indian companies, and further integrate India with global capital markets,” said Dilip B Desai, chairman of DHC – Desai Haribhakti.
Further, the ministry has updated Form LEAP-1, which companies use to submit their prospectus to the Registrar of Companies (RoC), to incorporate the changes to the overseas listing norms. The revised form requires companies to disclose whether any inspection, investigation or inquiry has been ordered against them under the Companies Act, 2013.
Source: The Financial Express
