Revised Direct Listing Norms at GIFT City Set for Early July Notification, Says IFSCA Chairman

The International Financial Services Centres Authority (IFSCA) is set to finalize revised norms for the direct listing of companies at Gujarat International Finance Tec-City (GIFT City) by early July, as announced by Chairman K. Rajaraman on Wednesday. This move comes after recognizing the need for updated regulations based on feedback from various stakeholders over the past two months. While specific changes in the revised norms were not disclosed, this development is poised to facilitate unlisted companies in listing on international exchanges by August.

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Rajaraman highlighted that for Indian companies already listed, the Securities and Exchange Board of India (Sebi) would need to amend its regulations to enable these entities to access foreign capital through GIFT City. Sebi is expected to take up to three months to make the necessary adjustments in its frameworks. The IFSCA has already provided its inputs on this matter, aiming to streamline the process for domestic companies, which will treat equity issues at IFSCA akin to a follow-on public offer.

Companies operating in sectors like e-commerce and technology startups, especially those headquartered overseas with significant business operations in India, are anticipated to leverage direct listing for accessing global capital via IFSCA. This initiative is also expected to bolster the growth of brokerages and merchant bankers within GIFT City, which currently houses 50 brokerages primarily trading in Nifty-50.

The inclusion of India in global bond indices is set to increase interest in the overseas direct investment route. Additionally, the IFSCA has cleared the path for issuing sovereign green bonds, with investments to be made in dollars but denominated in Indian rupees. The timing for this issuance now rests with the government's decision.

Enhancements and Innovations at GIFT City

On another front, the proposed merger between India INX and NSE IX has been called off, a decision welcomed by Rajaraman as it promotes competition, driving innovation and delivering better services through the operation of two separate exchanges. Furthermore, the IFSCA has authorized IIBX, the bullion exchange at GIFT City, to launch gold futures within the next 15 days, with plans to introduce silver futures in the coming months.

Since its inception, IIBX has witnessed significant trading volumes, with 10 tonnes in gold and over 1,000 tonnes in silver traded. The surge in silver trading is attributed to the comprehensive economic partnership agreement (CEPA) signed with UAE. Rajaraman also mentioned that Indian companies specializing in bookkeeping, accounting, and taxation services are encouraged to operate from GIFT City, tapping into the high demand for such services in Western markets.

This series of developments underscores IFSCA's commitment to enhancing GIFT City's appeal as a global financial hub. By updating regulations and expanding services, IFSCA aims not only to attract more international business but also to provide Indian companies with a platform to access global markets and capital efficiently.