The Department of Economic Affairs (DEA) of the Ministry of Finance has notified an amendment to the Securities Contract Regulation Rules (SCRR), 1957, with an aim to remove hurdles and cumbersome processes for Indian entities to list their securities on foreign exchanges. In this regard, this amendment is a major step forward in facilitating direct listing of equity shares by Indian companies at the IFSC located at GIFT IFSC, Gujarat, for better access to global capital markets.
The new regulations are especially welcome for Indian startups and companies in new sectors like technology, for whom this would be a fast track to raising capital internationally. The amendments include provisions under the ‘Regime for direct listing of shares of companies incorporated in India on international stock exchanges’ under the Foreign Exchange Management Act. [Non-Debt Instruments] Regulations, 2019, and the Companies [Listing of Equity Shares in Permissible Jurisdictions] Rules, 2024. Together, these rules lay down a facilitative regulatory regime that enables alignment of India’s listing requirements with globally accepted principles. This would facilitate Indian companies to issue and list their shares on international stock exchanges permitted under the GIFT IFSC with ease.
Key amendments include the reduction of the minimum public offer. Companies seeking to list specifically on international exchanges on the GIFT IFSC are required to offer and allocate at least 10 per cent of the post-issue capital to the public. This represents a significant reduction from previous requirements and is designed to make listing more viable, particularly for start-ups and smaller companies that might struggle to meet higher thresholds.
Apart from facilitating initial listing, the DEA also facilitates continued listing of companies already listed on international exchanges on the GIFT IFSC. As per the amended rules 19(2)(b) and 19A of the SCRR, such companies will be required to maintain a minimum public shareholding of 10 per cent. This is also in line with international practices and will enable Indian companies to be more competitive and attractive to international investors, who are accustomed to these rules in other major financial centres.
These changes represent the Government of India’s broader strategy to establish a vibrant and globally competitive financial services ecosystem within the country. With this lowering of the barrier to entry and moving the goal closer to global standards, the amendments are expected to attract many more Indian startups and technology companies to the GIFT IFSC, positioning it as a gateway for Indian companies to international capital markets. This is very important for startups and technology industries, which typically need large doses of capital to scale up and become more competitive globally. GIFT IFSC, conceived to compete with major global financial centres such as Singapore, Dubai and London, is gradually emerging as the centrepiece of India’s attempt to reform its financial sector. The government, through these changes, is not only making it easier for companies in India to raise international capital but is also making the overall proposition of GIFT IFSC more attractive as a global financial centre.
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