Pointing out that preparations for direct stock listings on exchanges at GIFT City in Gujarat have been completed, the unified regulator - International Financial Services Centres Authority or IFSCA - said that the direct listings are expected to happen by January or February 2025.
“The direct listing regulations were modified and they came out only in the month of August. Companies will do their due diligence and then approach merchant bankers, do road shows and come back to us for filing. So it will definitely happen after January or February 2025,” K Rajaraman, chairperson of IFSCA, told businessline. The International Financial Services Centres Authority (Listing) Regulations, 2024, were notified in August 2024.
The New Listing Regulations have been drafted to give an impetus to listing of equity instruments (primarily by unlisted Indian companies as well as foreign companies), bonds and other permitted financial products on the stock exchanges in the IFSC. It will enable Indian and foreign issuers to access capital through issue and listing of securities on the stock exchanges in the IFSC. “We are ready from our side. It is for the companies to decide. When the companies approach us, both the exchanges and us will go through their papers and see if the companies are fit for the markets,” Rajaraman added.
As per the listing regulations, the issuer shall file an application with a recognised stock exchange seeking in-principle approval for listing of specified securities. If the application is made to more than one recognised stock exchange, the issuer shall choose one of them as the designated stock exchange. Thereafter the recognised stock exchange shall grant an in-principle approval or reject the application within 15 days from the date of receipt of the application.
Among the general eligibility criteria mentioned in the new regulations, an issuer incorporated or set up either in an IFSC or in India or in a Foreign Jurisdiction shall be eligible to list its securities or any other permitted financial product on the stock exchange. A supranational or a multilateral or a statutory institution; a municipality or any similar body or any entity which offers or proposes to offer sovereign debt securities will also be eligible to list its debt securities on the stock exchanges within GIFT City.
An issuer shall be eligible to make an initial public offer of specified securities, only if the issuer has an operating revenue of at least $20 million in the last financial year or averaged over the last three financial years; or if the issuer has a pre-tax profit of at least $1 million in the last financial year or averaged over the last three financial years; or if the issuer has a post issue market capitalisation of at least $25 million.
The IFSCA had constituted a Standing Committee on Primary Markets which was chaired by TV Mohandas Pai in February, 2024, to advise IFSCA on policy and regulatory matters for the development of a vibrant and robust primary market in GIFT IFSC. The Committee recommended that the IFSCA’s regulatory framework for listing of companies should be aligned with other international financial centres such as Singapore, Hong Kong, USA and UK. Following extensive deliberations and public consultations, it was decided to replace the existing IFSCA (Issuance and Listing of Securities) Regulations, 2021, with the New Listing Regulations.