IFSCA sets eligibility norms for direct listings on GIFT City exchanges

Eligible companies may directly list shares on GIFT City exchanges without a public offer under an IFSCA framework covering financial thresholds, disclosures and pricing

The International Financial Services Centres Authority (IFSCA) has proposed allowing companies to directly list their equity shares on stock exchanges in GIFT City without making a public offer, subject to eligibility thresholds, disclosure requirements and price-discovery mechanisms, according to a consultation paper.

 

Under the draft framework, issuers that are not listed in India or overseas can list directly if they meet at least one of three financial criteria: minimum operating revenue of $20 million, pre-tax profit of $1 million, or post-listing market capitalisation of $50 million.

 

Globally, direct listings without a public offer are already permitted on major exchanges such as the NYSE and Nasdaq in the US, the London Stock Exchange and the Tokyo Stock Exchange, each with defined thresholds for profitability, revenue, market capitalisation and shareholder base.

 

 

“Companies which have successfully scaled and expanded with the capital provided by their founders and/or institutional investors may not require additional fund raising in the foreseeable future. However, such companies may still seek to list their securities without undertaking a public offer to enhance their visibility, build investor confidence, improve corporate governance standards, and provide an avenue for price discovery and liquidity for existing shareholders,” the consultation paper noted.

 

The proposal also permits firms with superior voting rights (SR shares) to list without an initial public offering, provided such shares were approved by shareholders and held for at least three months before filing.

 

IFSCA has outlined a streamlined approval process, requiring companies to seek in-principle clearance from a recognised stock exchange within 15 days.

 

The issuer must then file an information document, vetted by a registered investment banker, containing material disclosures to enable informed investor decisions.

 

The document will include details such as risk factors, capital structure, financial statements, litigation, related-party transactions and management information.

 

Financial statements must cover at least three years and be no older than six months. They must be prepared under IFRS, US GAAP, Ind AS or equivalent standards, with reconciliation where necessary.

 

To ensure an adequate float, Indian-incorporated issuers must comply with domestic minimum public shareholding norms, while foreign issuers must maintain at least 10 per cent public shareholding after listing.

 

Pricing will be based on an independent valuation report that is no older than three months. Exchanges will conduct a special pre-open session on the first day of trading for price discovery, and companies may appoint market makers to improve liquidity.

 

The proposed framework operationalises provisions under the IFSCA Listing Regulations, 2024, which allow listing without a public offer, and is aimed at enhancing GIFT City’s attractiveness as a global capital-raising hub.