Govt Eases Overseas Listing Norms, Expands Global Fundraising Options

The government has expanded overseas fundraising opportunities for Indian companies by allowing them to list a wider range of financial instruments, including convertible debentures and preference shares, on international exchanges operating in GIFT City. The revised framework also extends eligibility to certain unlisted public companies and businesses with negative net worth, subject to prescribed conditions, in a move aimed at attracting foreign capital and strengthening India's international financial markets.

The Ministry of Corporate Affairs (MCA), through a notification dated November 3, introduced the Companies (Listing of Equity Instruments in Permissible Jurisdictions) Amendment Rules, 2026, amending the framework introduced in January 2024. The changes expand eligible securities beyond equity shares to include convertible debentures and preference shares, providing companies with greater flexibility in structuring international investments and fundraising.

Companies with negative net worth can now pursue overseas listings, provided at least 75 per cent of the net offer is allotted to Qualified Institutional Buyers (QIBs). Unlisted public companies operating within IFSC jurisdictions are also eligible, subject to IFSCA regulations. The amendments further reduce the waiting period after repayment of overdue obligations to banks, financial institutions and secured creditors from two years to more than six months. They also clarify provisions concerning rectified filing defaults, replace 'shareholders' with 'holders' and introduce additional disclosures through revised Form LEAP-1 regarding inspections, investigations and inquiries.

India's direct overseas listing initiative originated from the Union Budget 2023-24 announcement by Finance Minister Nirmala Sitharaman on July 28, 2023. The enabling Companies Act provisions came into force on October 30, 2023, followed by the Direct Listing Scheme on January 24, 2024. India International Exchange (India INX) and NSE International Exchange (NSE IX) at GIFT City were designated as permitted exchanges under IFSCA supervision. In August 2024, minimum public offer and continuous public shareholding requirements were reduced to 10 per cent for eligible companies listing solely on IFSC exchanges. IFSCA also introduced its Listing Regulations, 2024, establishing a framework for equity and debt securities.

The reforms could particularly benefit startups, technology companies and capital-intensive businesses requiring substantial investment before achieving profitability. They may also provide additional exit opportunities for private equity and venture capital investors holding preference instruments.

GIFT City's existing international debt market provides a foundation for this expansion. IFSCA data showed debt securities worth USD 85.91 billion across 249 listed instruments as of September 2026. However, this represents the broader IFSC debt market, not direct equity listings under the scheme.

Industry experts said the changes could deepen capital markets and attract international investors. Anjali Malhotra of Nangia Global highlighted greater flexibility in eligible securities, while Suresh Swamy of Price Waterhouse & Co LLP pointed to improved exit opportunities for PE and VC investors. Amit Baid of BTG Advaya cautioned that clarity on FEMA, taxation and investor exits would be essential to translating regulatory changes into meaningful capital inflows.