IFSCA rules for direct listing in GIFT City within a month; New trading activities planned

Mumbai: The International Financial Services Centers Authority chairman K Rajaraman said that regulations for direct listing of Indian companies will be out in a month after which companies can apply for a listing. The IFSCA – the unified regulator for the GIFT IFSC - expects to clear listing proposals in a month.

Finance Minister Nirmala Sitharaman, in January, amended laws to permit the direct listing of unlisted companies in the GIFT IFSC. This route is expected to benefit new-age startups that were considering overseas incorporation to tap international capital markets. GIFT City functions as an offshore financial center with operations in foreign exchange, but it is located on Indian soil.

“Our regulations will be out in the first week of July. We should be able to approve an IPO within a month because we have smaller number of proposals,” said Rajaraman. He was speaking to newspersons at a BSE event in Mumbai.

IFSCA is also looking at expanding commodities trading activity in GIFT IFSC. “Commodity derivatives include gold and silver, with gold futures available soon. Silver futures are also expected in a few months. We are looking at launching more commodities like base metals and energy products. We have set up an expert committee for commodity trading to provide recommendations,” said Rajaraman.

GIFT City IFSC is also preparing the ground for the maiden issue of Sovereign Green Bonds by the government of India. “Now, we are waiting for RBI to decide when they will issue the SGBs. The investors can pay in foreign exchange but the SGB would be denominated in rupees," said Rajaraman.

Rajaraman said that close to $500 million in Overseas Derivative Instruments (ODI) have been cumulatively issued upto to June 2024. These have been largely arranged through forign banks through their global clientele.

He said that the objective was to encourage investors to re-route foreign direct investments through, who were coming through double tax avoidance agreements like Paris, to GIFT City. The IFSCA chief also expects some of the funds flow into Indian bonds following India’s inclusion in the JP Morgan Bond Index to be channeled through GIFT City. “Foreign fund managers not registered as FPI in India may want to use the ODI route to get investments in India,” he said.

The other activities that IFSCA is looking to promote in GIFT City is leasing of ships. “Recently, we attended an IOSCO meeting and engaged with the shipping industry in a round table in Greece. Greece owns about 20% of the world's shipping fleet. We told them about the opportunities in India for leasing ships,” he said.


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