IFSCA Proposes Direct Listing Of Companies In GIFT City Without IPO Route

The International Financial Services Centres Authority (IFSCA) has proposed a framework allowing companies to directly list their equity shares on stock exchanges in GIFT City without undertaking an initial public offering (IPO), according to a consultation paper.

The proposed rules aim to provide an alternative listing route for companies that have already raised capital from founders or institutional investors but do not require immediate fundraising.

Such companies would be able to enhance visibility, improve corporate governance standards and provide liquidity opportunities for existing shareholders through direct listing.

Under the draft framework, companies that are not listed in India or overseas would be eligible for direct listing if they meet at least one of three financial conditions.

These include minimum operating revenue of $20 million, pre-tax profit of $1 million, or a post-listing market capitalisation of $50 million.

Direct listings without a public offer are already permitted on several major global exchanges, including the New York Stock Exchange, Nasdaq, London Stock Exchange and Tokyo Stock Exchange, subject to their respective eligibility requirements.

The proposal also allows companies with superior voting rights (SR) shares to opt for direct listing, provided such shares have received shareholder approval and have been held for at least three months before filing the listing application.

IFSCA has proposed a simplified approval process under which companies would need to obtain in-principle approval from a recognised stock exchange within 15 days.

Following this, issuers would be required to submit an information document reviewed by a registered investment banker.

The document would include key details such as business risks, capital structure, financial statements, legal disputes, related-party transactions and management information to help investors make informed decisions.

Companies would need to provide financial statements covering at least three years, prepared under accounting standards such as IFRS, US GAAP, Ind AS or equivalent frameworks. The statements must not be older than six months at the time of filing.

To maintain adequate market liquidity, Indian companies would need to comply with domestic minimum public shareholding requirements, while foreign issuers would be required to maintain at least 10% public shareholding after listing.

Pricing of shares would be determined through an independent valuation report issued within three months of listing. Stock exchanges would also conduct a special pre-open trading session on the first day to enable price discovery. Companies may appoint market makers to support liquidity.

The proposed framework builds on provisions introduced under the IFSCA Listing Regulations, 2024, and is aimed at making GIFT City a more attractive destination for global companies seeking access to international capital markets.