XED’s $12-mn IPO: 10 key things to know about the first IPO from GIFT City

IPO size

The total offer size is pegged at $12 million (around Rs 100 crore). It may look modest compared to mainboard IPOs but is significant as a regulatory milestone. It comprises a $9.6 million fresh issue and $2.4 million offer for sale (OFS).

Where and how it trades, who can bid

The equity shares are proposed to list on NSE IFSC and India INX; NSE IFSC is the Designated Stock Exchange. Bids must be funded in freely convertible foreign currency (USD) from offshore/IFSC accounts — Indian residents are not eligible except via narrow, regulated routes (e.g., RBI LRS or if regulatory permission is granted). That makes this an institutional/foreign investor market to start with, not a domestic retail event.

Book running lead managers

Global Horizons Capital Advisors (IFSC) Private Limited is the sole Book-Running Lead Manager.

Global book-building, IFSC rules

Allotments will be on a proportionate or discretionary basis under IFSCA norms, with refunds settled within five working days. Price band and lot size will be disclosed two working days before opening. Listings at GIFT City are governed by IFSCA’s 2024 Listing Regulations

Anchor investor process

Anchor bids will be taken in an exclusive window; the DRHP allows an anchor discount of up to 20% (to be finalised before opening) and requires minimum anchor bids of more than $1 million. Anchor allotments have a lock-in of 90 days.

Promoter holding

The DRHP shows that John Kallelil John holds 50,000 shares (44.83%) and Meenu John holds 47,060 shares (42.20%), together amounting to 87.03% of the pre-offer equity share capital on a fully diluted basis. Both are explicitly named as Promoter Selling Shareholders in the Offer for Sale. GIFT City rules mandate only 10% public float post-listing, making it easier for smaller or closely held firms like XED (with promoters at ~around 87% pre-IPO) to go public without diluting significant control.

How IPOs in GIFT City differ from mainboard issues

Unlike mainboard IPOs that mandate 25% public float within a certain period post listing, GIFT requires only 10%. Further, IPOs in GIFT City enjoy tax incentives that are absent in main board issues: no STT, capital gains exemptions for non-resident investors, and tax holidays on dividends — potentially making valuations more attractive. Incidentally, main board POs don’t allow discounts for anchor allotments, while IFSCA permits up to 20% discount, with a $1 million minimum bid and a longer 90-day lock-in (vs. 30 days for main board issues). Also, IFSCA rules allow public issues to allot to as few as one investor in certain cases, which is again not the case in main board IPOs.

Use of proceeds: tech and M&A

XED plans to deploy proceeds towards technology capex at $1.8 million, working capital at $2.4 million, IPO costs at $1.2 million, and $4.2 million for general corporate purposes and potential acquisitions. Unlike most Indian IPOs, inorganic expansion is explicitly budgeted.

Business profile and risks

Founded in 2018, XED runs executive training programs, often in collaboration with Cornell University faculty. It competes with platforms like Eruditus, UpGrad, and edX in a global $98.6 billion executive education industry projected to grow through 2030. The company’s revenue rose from $1.7 million in FY23 to $4.0 million in FY24 and stands at $4.6 million in FY25. Bottom line swung from a loss of $0.49 million in FY23 to a profit of $0.14 million in FY25, yielding EPS of $1.43.

A large share of revenues comes from Cornell-led programs — a key risk flagged in the DRHP. Over-reliance on a single academic partner may weigh on sustainability if tie-ups weaken, stated the DRHP.