Centre Notifies Rules For Direct Listing Of Indian Companies On GIFT IFSC Exchanges

The Centre on Wednesday (January 24) cleared the way for direct listing of Indian companies on the exchanges of the Gujarat International Finance Tec (GIFT) City by notifying the rules for the same.

With this, Indian companies would be able to list their shares on international stock exchanges – India International Exchange and NSE International Exchange, which operate under the regulatory supervision of the International Financial Services Central Authority (IFSCA).

Finance minister Nirmala Sitharaman announced in July last year that the government would allow direct listing of Indian companies at GIFT- IFSC exchanges. 

In a statement, the finance ministry said that the notified rules provide an overarching regulatory framework to enable public Indian companies to issue and list their shares in permitted international exchanges.

“As of now, the framework allows unlisted public Indian companies to list their shares on an international exchange. SEBI is in the process of issuing the operational guidelines for listed public Indian companies,” the ministry said.

It said that the policy will reshape the Indian capital market landscape and offer Indian companies, especially startups and companies in the sunrise and technology sectors, an alternative avenue to access global capital beyond the domestic exchanges.

The development is part of the government’s efforts to help Indian startups raise money from global investors without leaving the country. The Centre also aims to encourage startups to reverse flip.

Commenting on the development, Pantomath Capital Advisors MD Mahavir Lunawat said, “Direct Listing at IFSC enables corporates seeking cross-country capital raising to tap cross-listings, primarily for substantial finance, which in turn can seize expansion opportunities both domestically and internationally. This has been hugely facilitated by the rapid market liberalisation and greater integration of global securities market. This decision aims to further propel the transformation of IFSC into a thriving global financial hub. This will provide access to global capital and result in wider capital formation for the Indian business enterprises.”

The government aims to develop GIFT city into a global financial hub and a virtual offshore destination for startups and investors. 

As a result, a number of startups have also started making investments in GIFT City. Paytm recently said it would invest INR 100 Crore in GIFT City to build a global financial ecosystem, while Infibeam Avenues is also looking to establish an AI hub in GIFT. 

A number of investors have also moved to the city in Gujarat. Last month, angel investment networking platform We Founder Circle (WFC) said its GIFT City Fund raised $10 Mn (around INR 83 Cr) and onboarded more than 250 investors.