Notification for direct listing of firms on GIFT City awaits PMO approval

IFSCA chairperson K Rajaraman

The official notification regarding direct listing of Indian companies on foreign exchanges at the International Financial Services Centre (IFSC) in Gujarat International Financial Tech (GIFT) City is just around the corner.

"It is currently awaiting the PMO approval and could be out anytime soon," IFSCA chairperson K Rajaraman told Moneycontrol on the sidelines of Asia Securities Forum AGM in Mumbai. "Recommendations by the working group, coordinating with the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI), will also be out in 10-15 days. Then, we can make necessary amendments to enable the procedure by end of the year."

The advantages of trading in GIFT City are simple, all trades are dollar-denominated. Thus, foreign investors would not have to incur the extra cost of converting their currency and hedging it. In September 2023, the monthly turnover on IFSC international stock exchanges stood at $67.3 billion.

Also Read: Direct listing on GIFT City could open Pandora's box for Indian exchanges

There are two operational international exchanges at GIFT City - BSE's India INX and NSE's International Exchange. Some 69 broker-dealers, 19 clearing members, two clearing corporations and five custodians are also registered at GIFT City. Separately, there is also a proposal to merge the GIFT City units of the NSE and the BSE.

India is also exploring the possibility of direct listing of Indian companies at the London Stock Exchange (LSE).

Funds at GIFT City

Speaking at the event, Rajaraman said that nearly about 68 alternate investment funds which have been launched by about 78 fund managers in GIFT City.

"They have a targeted focus of about $20 billion, of which nearly about $4 billion have been committed and about $1 billion have been invested into India as well. These include a mix of hedge funds, venture capital funds, as well as the private equity funds," he said.

A non-resident investor's income from offshore investments that go through an AIF set up in an IFSC is not be taxed. Legally, IFSC is considered a jurisdiction separate from the rest of India, that provides financial services in foreign currency.