The proposal comes as IFSCA looks to broaden the avenues for equity listings in GIFT City after the jurisdiction’s first IPO attempt failed to take off. | Photo Credit: Elke Scholiers

Companies looking to go public without raising fresh capital could soon have a formal route to list in GIFT City, with the International Financial Services Centres Authority (IFSCA) proposing a regulatory framework for the direct listing of equity shares and convertible securities without an initial public offering (IPO).

In a consultation paper released on July 13, the regulator proposed detailed eligibility norms, disclosure requirements and pricing mechanisms for companies seeking to list on recognised stock exchanges in the International Financial Services Centre (IFSC) without undertaking a public offer. The regulator said the proposed framework will facilitate liquidity and exit opportunities for founders, early-stage investors, private equity and venture capital funds, as well as employee stock option (ESOP) holders, while allowing companies to avoid shareholder dilution and the underwriting and issuance costs associated with a traditional IPO.

“Regulation 40 of the IFSCA (Listing) Regulations, 2024 already provides an enabling provision permitting an issuer to list its equity shares on the recognised stock exchanges in IFSC without undertaking a public offer. The consultation paper now proposes the detailed regulatory framework for such direct listings, including eligibility conditions, procedural requirements and disclosure standards,” IFSCA sources told the businessline.

According to IFSCA, the route is intended for companies that have already scaled their businesses with capital from founders or institutional investors and do not require fresh fundraising but still want the benefits of being publicly listed. Rajaraman said new-age companies are increasingly exploring alternatives to the traditional IPO route.

“Companies that seek listing without undertaking a public offer may do so to enhance transparency, corporate governance standards and financial disclosures, meet regulatory, contractual or business requirements that necessitate listing on a recognised stock exchange, avoid dilution of existing shareholders where no additional capital is required, and reduce the overall time required for listing compared with a normal IPO,” the official added.

The proposal comes as IFSCA looks to broaden the avenues for equity listings in GIFT City after the jurisdiction’s first IPO attempt failed to take off. Earlier this year, XED Executive Development withdrew what was slated to be GIFT City’s maiden IPO, citing muted investor participation and operational challenges, including KYC-related issues. Since then, the offshore financial centre has continued to attract listing interest through other routes.

In June, US-based workforce solutions provider Tryfacta filed draft papers for a dollar-denominated IPO on NSE International Exchange (NSE IX) and India INX, which, if completed, would become the first equity listing in India by a US-headquartered company. Earlier, in February, businessline also reported that Cyprus-listed Ellinas Finance would become the first company to undertake a cross-border equity listing between India and Cyprus on NSE IX, underscoring GIFT City’s growing ambition to position itself as an international capital-raising and listing hub.

The proposal

Under the new IFSCA proposal, companies would be eligible for direct listing if they have operating revenue of at least $20 million in the latest financial year (or on average over the previous three years), pre-tax profit of at least $1 million, or a post-listing market capitalisation of at least $50 million. The market capitalisation threshold is double the $25 million requirement prescribed for companies undertaking a public offer in the IFSC.

IFSCA said the higher threshold is intended to address concerns around liquidity and price discovery. “Listings without a public offer may present additional challenges in achieving adequate liquidity and price discovery due to the absence of fresh issuance and broad-based distribution,” the paper noted.

Unlike a conventional IPO, issuers will not publish an offer document but will instead file an information document through an IFSCA-registered investment banker, who will be required to undertake due diligence and certify that the disclosures are true and adequate. The document will include details on the company’s business, management, financial statements, shareholder agreements, related-party transactions, litigation, regulatory actions and risk factors, similar to disclosures made during a public issue.

To address the absence of a book-building process, IFSCA has proposed that the base listing price be determined through an independent valuation report. A special pre-open auction session on the first day of trading would then be used to discover the market price. Companies may also appoint market makers to improve secondary market liquidity after listing.

The regulator has proposed no restrictions on the class of investors who can buy or trade shares listed through the direct listing route, aligning the framework with international practices. Indian companies would continue to comply with the minimum 10 per cent public shareholding requirement under the Securities Contracts (Regulation) Rules, while the same threshold has been proposed for foreign issuers listing in the IFSC.

Studying other frameworks

In designing the framework, IFSCA studied listing regimes in major global markets, including the New York Stock Exchange, Nasdaq, the London Stock Exchange and the Tokyo Stock Exchange, where direct listings are already permitted. It cited companies such as Spotify, Roblox, Coinbase, Wise and Palantir Technologies as examples of businesses that have used the route.

However, the global experience has been mixed.

While companies such as Spotify and Coinbase have demonstrated that direct listings can provide liquidity without fresh capital raising, several smaller issuers have struggled with low trading volumes and limited liquidity. A number of high-profile technology companies have also explored direct listings over the years before eventually opting for traditional IPOs, reflecting the challenges of price discovery and investor participation without the marketing and book-building process associated with a conventional public issue.

IFSCA has invited public comments on the proposed framework until August 3, after which it is expected to finalise the regulations.

Published on July 15, 2026