GIFT City Gets Another Boost As Govt Allows Direct Listing Of Companies On IFSC Exchanges

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

SUMMARY

Companies can now register on IFSC exchanges even if they are not listed on any of the exchanges in the country, Finance Minister Nirmala Sitharaman said

The government’s move will facilitate access to global capital and result in better valuations for Indian companies, the minister said

With the Centre aggressively promoting GIFT City to transform it into a thriving financial hub, GIFT has seen a lot of interest from global companies and funds

In another push to transform GIFT city in Gujarat into a thriving financial hub, Finance Minister Nirmala Sitharamana on Friday (July 28) announced that the government has allowed Indian companies to list directly on IFSC Exchanges.

Companies can now register on IFSC exchanges even if they are not listed on any of the exchanges in the country.

“In May 2020, I had said that direct listing of securities by Indian public companies would be permissible in foreign jurisdictions… Now, I am pleased to announce that the government has taken a decision to enable direct listing of listed and unlisted companies on IFSC exchanges,” Sitharaman said while launching the Corporate Debt Market Development Fund (CDMDF) in Mumbai.

The minister added that this decision will facilitate access to global capital and result in better valuations for Indian companies.

The minister said that the Indian financial market ecosystem today ranks among the best in the world in terms of technology as well as value-cum-volume of business.

“The Indian capital markets have been a trendsetter of sorts in many aspects of trading, including being one of the fastest in terms of settlement of trade and also in certain areas related to risk mitigation and governance,” she said.

Initially developed under the Special Economic Zones Act of 2005, GIFT City was allowed to host the country’s first IFSC in 2019. The city’s commercial activities are under two distinctive zones – the GIFT SEZ (the non-IFSC area) and the GIFT IFSC.

With the Centre aggressively promoting GIFT City, it has been receiving a lot of interest from global companies and funds.

Last month, Google CEO Sundar Pichai said that the tech giant will set up its global fintech operation centre in GIFT City.

Speaking at Inc42’s MoneyX earlier this month, Dipesh Shah, executive director (Development), International Financial Services Centres Authority, GIFT City, said that GIFT IFSC in Gujarat has triggered reverse flipping and countries like Singapore and Mauritius are now asking private equity (PE) investors what needs to be done to stop them from moving to GIFT IFSC.

During her 2023-24 Budget speech, Sitharaman also announced plans to set up data embassies in GIFT IFSC for countries seeking digital continuity solutions. This initiative will provide a supportive legal, regulatory, and robust digital infrastructure at GIFT IFSC.

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