Direct Listing at GIFT City Without IPO – A New Era of Global Capital Access

Empowering Cross-Border Capital Markets through IFSCA Regulations

The International Financial Services Centres Authority (IFSCA) has taken a major step towards integrating Indian capital markets with global financial systems through the IFSCA (Listing) Regulations, 2024, as amended up to October 14, 2025.

These landmark regulations provide a comprehensive framework for listing equity shares and other financial products on recognised stock exchanges at the International Financial Services Centre (IFSC), GIFT City, Gujarat.

What is Direct Listing?

Under Regulation 40 of the IFSCA (Listing) Regulations, companies can now list their specified securities directly on IFSC exchanges without making a public offer.

This means that eligible companies—Indian or foreign—can have their shares admitted for trading on IFSC stock exchanges such as India INX or NSE IFSC, without undertaking the traditional IPO process.

The move simplifies access to global investors and allows companies to unlock liquidity, enhance visibility, and benefit from GIFT City’s globally competitive ecosystem.

Applicability of the IFSCA Listing Regulations, 2024 (Amended October 14, 2025)

The IFSCA Listing Regulations, 2024, as amended in 2025, establish a comprehensive framework governing the issuance and listing of a wide range of financial instruments within the International Financial Services Centre (IFSC). These regulations are designed to ensure transparency, investor protection, and ease of access to capital for both Indian and foreign entities.

The scope of applicability extends across multiple categories of issuers and instruments, encompassing:

1. Initial Public Offers (IPOs) by unlisted entities seeking to list their specified securities for the first time;
2. Follow-on Public Offers (FPOs) by listed entities aiming to raise additional capital;
3. Initial Public Offers by Special Purpose Acquisition Companies (SPACs), recognizing their growing role in global capital markets;
4. Rights Issues, Preferential Issues, and Qualified Institutions Placements (QIPs) by listed entities, facilitating flexible capital-raising avenues;
5. Issuance and Listing of Depository Receipts, enabling cross-border investment participation;
6. Issue and Listing of Debt Securities, broadening the spectrum of instruments available to investors;
7. Secondary Listing of Securities by entities already listed on other recognized exchanges, promoting market integration; and
8. Listing of Short-Term Instruments and Financial Products, such as Commercial Paper, Certificates of Deposit, and other securities permitted by the Authority.

Through this wide-ranging applicability, the regulations create an inclusive and flexible listing ecosystem—catering to diverse market participants while positioning GIFT City as a globally competitive financial marketplace.

Key Features of the Framework

1. Regulatory Foundation:

The framework draws its authority from the IFSCA Act, 2019 and related securities laws. It governs the listing of:

• Equity and convertible securities
• Debt instruments and depository receipts
• Other permissible financial products

2. Eligibility for Listing:

A. General Eligibility Criteria for Listing under the IFSCA Listing Regulations, 2024 (Amended October 14, 2025)

The IFSCA Listing Regulations, 2024, as amended in 2025, set out clear and comprehensive eligibility standards that issuers must meet before listing their securities or other financial instruments on a recognized stock exchange within the International Financial Services Centre (IFSC). These criteria are designed to uphold the integrity of the capital markets, ensure compliance with international standards, and protect investor interests.

1. Jurisdictional and Legal Compliance : To be eligible for listing, an issuer must be duly incorporated or established either in an IFSC, in India, or in a foreign jurisdiction, in accordance with the governing laws of its home country. This ensures that the entity operates within a legitimate legal framework, offering confidence to investors and regulators alike. Additionally, the issuer must function in conformity with its constitutional documents—such as its charter, memorandum, or articles of association—and comply with the legal provisions applicable to its proposed securities.

For public Indian companies seeking to list their equity shares on an IFSC exchange, there is an added requirement to satisfy the eligibility criteria prescribed under Schedule XI of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 and the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024. This alignment ensures that cross-border listings adhere to both domestic and international regulatory standards.

2. Expanded Eligibility for Debt Issuers : Beyond conventional corporate issuers, the framework also extends eligibility to a diverse range of entities for listing debt instruments.

These include:

(i) Supranational, multilateral, or statutory institutions (such as global development banks);

(ii) Municipalities or similar public bodies, thereby opening the door for urban infrastructure financing; and

(iii) Entities issuing or proposing to issue sovereign debt securities, facilitating broader participation in government-backed financial instruments.

This inclusive approach enhances the depth and diversity of the debt market within GIFT City, strengthening its position as a hub for international fixed-income instruments.

3. Integrity and Compliance Standards

In order to safeguard market credibility, the regulations explicitly disqualify any issuer from listing its securities if it, or any of its promoters, controlling shareholders, directors, or existing shareholders offering shares, falls under any of the following categories:

(i) Debarred from accessing the capital markets by any competent regulatory authority;

(ii) Classified as a wilful defaulter, having deliberately failed to meet debt obligations; or

(iii) Identified as a fugitive economic offender, as per the applicable laws of its home jurisdiction.

By embedding these safeguards, the IFSCA ensures that only credible and compliant entities access the capital markets. This not only enhances investor confidence but also aligns the IFSC’s governance standards with leading global financial centers.

In essence, the General Eligibility Criteria reinforces IFSCA’s commitment to fostering a transparent, credible, and globally aligned listing environment—ensuring that only entities of sound reputation and legal standing can participate in the IFSC’s capital markets ecosystem.

B. Eligibility Criteria for an Initial Public Offer at GIFT City (IFSCA)

The International Financial Services Centres Authority (IFSCA) has introduced a comprehensive framework for companies seeking to make an Initial Public Offer (IPO) of specified securities on recognised stock exchanges located in GIFT City, Gujarat. The framework emphasizes financial robustness, transparency, and shareholder protection, aligning with global capital market standards.

1. Eligibility Criteria for Issuers

An issuer can access the public market through an IPO only if it meets at least one of the prescribed financial or market-based thresholds. The eligibility requirements ensure that only credible and financially sound companies can raise capital through the international financial markets. An issuer shall be eligible to make an IPO only if it satisfies any one of the following conditions:

(a) Revenue Benchmark:

The issuer must have an operating revenue of at least USD 20 million, either in the immediately preceding financial year or as an average of the past three financial years, based on consolidated audited accounts. This ensures that only businesses with consistent and significant revenue streams can access the market.

(b) Profit Benchmark:

Alternatively, the issuer may qualify if it has recorded a pre-tax profit of at least USD 1 million, either in the last financial year or averaged over the last three financial years. This criterion favours profitability and operational efficiency.

(c) Market Capitalization Criterion:

Even if the company does not meet the revenue or profit tests, it can still qualify for an IPO if its post-issue market capitalization is at least USD 25 million. This allows high-growth and asset-rich companies—such as those in the technology or infrastructure sectors—to access the market based on valuation strength.

(d) Alternative Criteria:

The IFSCA retains flexibility to prescribe other eligibility conditions from time to time, ensuring adaptability to evolving market conditions and international best practices.

The term “financial year” is interpreted according to the accounting year followed by the issuer in its home jurisdiction, providing regulatory alignment for global issuers.

C. Offer for Sale (OFS) Provisions

In an Offer for Sale (OFS), existing shareholders sell their shares to the public rather than issuing new shares. The IFSCA framework introduces clear guidelines to ensure that such sales are based on genuine, long-term ownership and not short-term speculative holdings.

(1) Minimum Holding Period

The securities offered for sale must have been held for at least one year prior to the filing of the draft offer document. If the equity shares arise from conversion of convertible securities or depository receipts, the combined holding period of both instruments shall count toward the one-year requirement. Conversion must be completed before the filing of the offer document, and full disclosure of the conversion terms must be made in the draft document.

(2) Exemptions from the One-Year Holding Rule

Certain legitimate business restructurings and corporate actions are exempted from this condition:

(a) Mergers or Amalgamations:

Equity shares acquired under a scheme of merger or amalgamation in exchange for business or invested capital that existed for more than one year before the scheme’s approval are exempted.

(b) Bonus Issues:

Equity shares issued as bonus shares on securities held for at least one year before filing are also exempted, provided:

They are issued from free reserves or share premium as of the end of the financial year preceding the filing year.

They are not derived from revaluation reserves or unrealized profits, ensuring genuine capital backing.

The IFSCA’s IPO eligibility framework is designed to maintain market integrity, investor confidence, and global competitiveness at GIFT City’s International Financial Services Centre. By combining financial thresholds with governance and disclosure safeguards, these regulations encourage credible issuers—both domestic and international—to list and raise capital through a transparent and well-regulated platform.

3. Secondary Listing Opportunities

Under Regulation 41, companies already listed on foreign stock exchanges can seek a secondary listing at GIFT City without a fresh public issue.

This facilitates cross-border dual listings, enabling global companies to access investors within India’s IFSC while maintaining listings in their home jurisdictions.

4. Foreign Currency Denomination

Securities listed at GIFT City can be denominated and traded in major international currencies such as USD, GBP, or EUR, offering flexibility to both issuers and investors.

Benefits for Issuers and Investors

The International Financial Services Centres Authority (IFSCA) Listing Regulations, 2024—further strengthened through the amendments of October 14, 2025—mark a significant step in positioning India’s GIFT City as a global financial hub. These reforms create a dynamic, investor-friendly ecosystem that benefits both issuers and investors in several key ways.

1. Global Capital Access:

The framework opens the door for Indian and foreign companies to raise and trade capital in foreign currency within a well-regulated Indian jurisdiction. By bridging domestic and international financial markets, GIFT City serves as a gateway for global capital inflows and cross-border investment opportunities.

2. Simplified Listing Process:

One of the most attractive features of the new regulations is the simplified approach to listing. The elimination of a mandatory public offer requirement reduces procedural hurdles, shortens approval timelines, and cuts compliance costs—making market entry more efficient and cost-effective for issuers.

3. Enhanced Liquidity and Valuation: The participation of global investors enhances share liquidity, fosters better price discovery, and strengthens market perception. With increased trading volumes and broader investor engagement, companies can benefit from improved visibility and potentially higher valuations.

4. Dual Listing Opportunities:

Indian companies now have the flexibility to pursue dual listings—both on domestic stock exchanges and within the IFSC. This dual approach widens investor participation, deepens market access, and strengthens India’s integration into global financial markets.

5. Tax and Regulatory Efficiency:

GIFT City continues to offer a highly competitive tax regime and a liberalized regulatory environment that supports capital mobility. Coupled with robust investor protection standards, these advantages make it a compelling destination for both issuers and global investors seeking efficiency and transparency.

In essence, the IFSCA Listing Regulations, 2024 (as amended in 2025), not only simplify the listing process but also expand global reach, enhance liquidity, and establish GIFT City as a key international finance and investment hub.

Post-Listing Compliance

Listed entities are required to adhere to the continuous disclosure and corporate governance obligations under Chapter XII of the IFSCA (Listing) Regulations, 2024.

These include periodic financial reporting, disclosure of material events, and adherence to global accounting standards such as IFRS, US GAAP, or Ind AS—ensuring transparency and investor confidence.

Strategic Significance

The introduction of the direct listing mechanism at GIFT City is a transformational milestone for India’s financial ecosystem.

It enables seamless global capital flow, encourages cross-border participation, and positions India’s IFSC as a trusted international capital market jurisdiction comparable to Singapore, Dubai, or London.

The framework not only offers Indian issuers an opportunity to access global liquidity without leaving India’s jurisdiction but also invites foreign issuers to engage with Indian and international investors in a unified, well-regulated platform.

Conclusion

The Direct Listing Framework at GIFT City under the IFSCA (Listing) Regulations, 2024, represents a forward-looking step toward making India a global financial powerhouse.

By enabling companies to list without a public offer, fostering cross-border listings, and harmonising global standards, IFSCA has opened new avenues for capital formation and investor participation.

As more companies explore this route, GIFT City is poised to emerge as a preferred destination for international listings and investment—a true gateway to global finance from Indian soil.

Source of information : IFSCA (Listing) Regulations, 2024, as amended up to October 14, 2025.

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The Author can be contacted at email id parageepatel@gmail.com.

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