IFSCA To Notify Revised Rules For Direct Listing On GIFT City

SUMMARY

Without elaborating on specific changes, IFSCA chairman said that the regulator will approve the norms by the end of June and the same will be notified by early next month

Rajaraman added that SEBI has to amend multiple existing regulations before companies listed in India can access foreign money through GIFT City

The central government in January this year notified the rules for direct listing of Indian companies on the exchanges of the GIFT City

The chairman of International Financial Services Centres Authority (IFSCA), K Rajaraman, has reportedly said that the regulator will notify revised norms for direct listing of companies at Gujarat International Finance Tec (GIFT) City early next month.

As per news agency PTI, Rajaraman on Wednesday (January 12) said that the IFSCA will approve the norms by the end of this month (June) and will be notified by early next month. However, he did not elaborate on the exact changes in the new draft rules.

“Based on our interactions with various users, we have realised that our regulations need a little update. Therefore, what we have done in the last two months is to update our listing regulations,” he reportedly said.

While unlisted companies can still currently list on the international exchanges (India International Exchange and NSE International Exchange) of the GIFT City, Rajaraman added that the companies will be able to list under the revised norms by August.

Notably, the Centre in January this year notified the rules for direct listing of Indian companies on the exchanges of the GIFT City.

Meanwhile, Rajaraman added that markets regulator Securities and Exchange Board of India (SEBI) has to amend multiple existing regulations before companies listed in India can access foreign money through the GIFT City. He added that SEBI will take up to three months for making the necessary amendments in its frameworks and that IFSCA had already provided its inputs on the issue.

Elaborating on the functioning of the international bourses at GIFT City, the chairman noted that the equity issue at IFSCA will be akin to a follow-on public offer for listed domestic companies. He assured that the regulatory body will clear the “issuances” within a month.

He added that technology startups and companies engaged in sectors such as ecommerce or those having headquarters overseas with substantial business in India will look for direct listing on IFSCA to access global capital.

Additionally, he asserted confidence that activities on the direct listing front will help grow the number of brokerages and merchant bankers at GIFT City. Sharing data, Rajaraman said that the City was currently hosting 50 brokerages, a majority of which primarily trade in Nifty50.

The inclusion of India in global bond indices will up the interest in the overseas direct investment route, he reiterated.

The latest development comes five months after the Centre paved the way for direct listing of Indian companies on the exchanges of the City by notifying rules. It is pertinent to note that finance minister Nirmala Sitharaman, in July last year, announced that the government would allow direct listing of Indian companies at GIFT- IFSC exchanges.

The move is part of the government’s plans to develop GIFT city into a global financial hub and a virtual offshore destination for startups and investors.

As a result, a number of investors have made a beeline for these international exchanges. Just a day ago, Chennai-based VC firm Unifi Capital launched two new funds at IFSCA. In March, the Union government and the Asian Development Bank (ADB) inked a $23 Mn loan agreement to spur research and innovation in the fintech space at the City.

In February, sovereign wealth fund Abu Dhabi Investment Authority (ADIA) also unveiled plans to establish a $4.5 Bn fund to invest in India via GIFT City.