Eligible Indian and foreign companies may soon be able to list their existing shares on GIFT City exchanges without launching a conventional initial public offering, under a proposed framework aimed at deepening India’s international capital market ecosystem.
The International Financial Services Centres Authority has proposed eligibility, disclosure and pricing norms for companies seeking to directly list their equity shares on recognised stock exchanges operating in GIFT City.
The framework is designed to operationalise the direct-listing route permitted under the IFSCA Listing Regulations. Unlike a traditional initial public offering, a direct listing would not necessarily involve the issuance of new shares or the raising of fresh capital. Instead, the existing shares of a company would be admitted for trading on an international exchange.
The proposal could provide a new liquidity channel for founders, employees, private equity investors and other existing shareholders, while helping companies gain market visibility and price discovery without undergoing a full-scale public offering.
Who Can List Directly on GIFT City Exchanges?
Under the proposed framework, an unlisted company incorporated either in India or overseas would need to satisfy prescribed financial eligibility conditions.
A company may qualify if it records operating revenue of at least $20 million, reports a pre-tax profit of at least $1 million, or is expected to achieve a post-listing market capitalisation of at least $50 million.
These thresholds indicate that IFSCA intends the route to be used primarily by commercially established businesses rather than early-stage or highly speculative companies.
The framework may be particularly attractive to mature companies that have already raised sufficient capital from promoters, institutional investors or private equity funds but still want the benefits of public-market visibility and shareholder liquidity.
For such companies, a direct listing could provide an alternative to the cost, dilution and extensive marketing process associated with a conventional IPO.
No Public Offer, But Strong Disclosure Requirements
The absence of a public offer would not exempt companies from regulatory scrutiny.
An eligible issuer would first be required to obtain in-principle approval from a recognised stock exchange in the International Financial Services Centre. The company would then have to prepare an information document containing detailed disclosures about its operations, financial condition, management and risk profile.
The information document would need to be vetted by an IFSCA-registered investment banker.
Companies would be expected to disclose their capital structure, business risks, audited financial statements, related-party transactions, management details, material litigation and other information relevant to investor decision-making.
The financial statements would generally be required to cover the previous three financial years and must comply with recognised accounting standards such as IFRS, US GAAP or Ind AS.
This disclosure-led structure is important because direct listings do not follow the traditional IPO book-building process, where institutional demand helps determine the issue price. Investors will therefore depend heavily on the quality of corporate disclosures and the credibility of independent due diligence.
How Will the Share Price Be Determined?
Price discovery is likely to be one of the most critical aspects of the proposed framework.
The company’s initial reference price would be supported by an independent valuation report prepared shortly before the listing. On the first day of trading, the exchange may conduct a special pre-open session to establish a market-driven opening price.
Companies may also be permitted to appoint market makers to improve liquidity and facilitate smoother trading.
However, valuation alone cannot guarantee an efficient market. A successful direct-listing ecosystem will require active institutional participation, analyst coverage, market-making support and sufficient trading volumes.
Without these elements, directly listed shares could face limited liquidity, wider bid-ask spreads and greater price volatility.
A Strategic Step for GIFT City
The proposal represents an important step in GIFT City’s ambition to emerge as a globally competitive financial centre.
India has already developed a sizeable international debt-listing market at GIFT City. The next stage is to build a credible equity market capable of attracting Indian companies, foreign issuers and global investors.
A well-functioning direct-listing framework could also encourage Indian businesses considering overseas listings in markets such as Singapore, London or New York to evaluate GIFT City as an alternative.
For promoters and investors, the framework promises liquidity and international visibility. For India, it offers an opportunity to retain more capital-market activity within its own regulatory ecosystem.
The Real Test Lies Beyond Regulation
IFSCA’s proposed norms provide the regulatory foundation for direct listings, but the success of the route will depend on market participation.
Companies will list only if they see a credible investor base, transparent price discovery and sustained secondary-market liquidity. International investors, meanwhile, will participate only if they are confident about governance, disclosures, settlement systems and regulatory consistency.
The proposed framework is therefore a necessary reform, but not a guaranteed breakthrough.
IFSCA has created a potentially valuable bridge between private ownership and public-market participation. The next challenge is to ensure that GIFT City develops the institutional depth required to make that bridge commercially meaningful.
