Let’s Start With What Most Articles Get Wrong
Search “direct listing GIFT IFSC” today and you will find articles confidently explaining how companies can list their shares and raise foreign currency capital from global investors. Some even walk you through the fundraising process, pricing mechanics, and book building.
Almost all of them are describing something else — an IPO or a public offer on GIFT IFSC exchanges.
A direct listing — specifically, a listing without a public offer under the IFSCA (Listing) Regulations, 2024 — is fundamentally different. No capital is raised. No new shares are issued. No money flows into the company. No book building. No underwriter. No subscription.
What it does instead is simpler, and depending on your structure, far more strategic: existing shares are admitted for trading on an international exchange within India’s regulatory perimeter.
That is the starting point. Everything else follows from here.
What Is GIFT IFSC — and Why Does It Matter for Listing?
GIFT City (Gujarat International Finance Tec-City) is India’s first and only International Financial Services Centre, located in Gandhinagar, Gujarat. It is a jurisdiction within India that operates under a distinct regulatory regime — designed to replicate the environment of global financial hubs like Singapore, Dubai DIFC, and London.
IFSCA is the unified authority for the development and regulation of financial products, financial services, and financial institutions in the IFSC. Prior to its establishment, domestic financial regulators — RBI, SEBI, PFRDA, and IRDAI — each separately regulated IFSC activities, creating overlap and inefficiency. International Financial Services Centres Authority
Today, IFSCA is the single window. One regulator. One framework. This is not just administrative convenience — for cross-border capital market transactions, it materially reduces regulatory coordination risk.
The two recognised stock exchanges at GIFT IFSC are India INX (a wholly-owned subsidiary of BSE Ltd.) and NSE IFSC (promoted by NSE). Both operate under IFSCA’s supervisory jurisdiction, trade in foreign currencies including USD, GBP, and EUR, and provide extended trading hours of 22 hours a day, making them among the longest-operating trading platforms globally.
What Is a Direct Listing in GIFT IFSC?
The concept finds its regulatory home in Chapter IV, Regulation 40 of the IFSCA (Listing) Regulations, 2024 — titled “Listing of Specified Securities Without Public Offer.”
Under Regulation 40, companies can list their specified securities directly on IFSC exchanges without making a public offer. Eligible companies — Indian or foreign — can have their shares admitted for trading on India INX or NSE IFSC without undertaking the traditional IPO process.
The operative word is without. Without a public offer. Without new share issuance. Without capital raising.
The purpose is purely to achieve a listing — to make existing shares tradeable on an internationally recognised exchange, accessible to global investors, with price discovery happening in foreign currency, inside India’s legal perimeter.
Think of it as what NYSE or Nasdaq call a direct floor listing — companies like Spotify and Coinbase used this route in the US. The GIFT IFSC architecture has created its equivalent, suited to Indian and cross-border company structures.
The Important Caveat Every Promoter Must Know in 2026
Here is where most advisors — and most articles — stop being accurate.
Regulation 40 exists in the statute. The operational framework under it has not yet been notified by IFSCA.
The regulation creates the legal permission. But IFSCA is yet to issue the circular or framework specifying the detailed conditions, eligibility norms, procedural requirements, documentation standards, and exchange-level mechanics specifically for a listing without public offer under Regulation 40.
That framework is expected in June 2026.
Until then, companies cannot simply walk into India INX or NSE IFSC and pursue a Regulation 40 listing. The plumbing — the operational infrastructure behind the regulation — is still being put in place.
This is not a minor footnote. In our experience advising on cross-border structuring at GIFT IFSC, this is the single most common misconception we encounter — promoters who believe the route is already fully open because the regulation exists. The permission exists. The process does not yet.
Why Is IFSCA Doing This? The Policy Rationale
Understanding the intent behind Regulation 40 helps you understand whether this route makes sense for your company.
IFSCA constituted a Standing Committee on Primary Markets (SCOP), chaired by Shri T.V. Mohandas Pai, in February 2024 to advise on policy and regulatory matters for the development of a vibrant and robust primary market in GIFT IFSC. The Committee recommended that IFSCA’s regulatory framework should be aligned with international financial centres such as Singapore, Hong Kong, USA, and the UK.
The direct listing route — listing without a public offer — sits squarely within that alignment agenda. In mature international markets, companies achieve exchange listing without necessarily raising capital from the public at the time of listing. This gives flexibility to promoters, PE-backed companies, and family businesses who want the benefits of a listed entity — transparency, global investor access, price benchmarking — without the obligations and dilution of a public offering.
Listing without public offer is permitted for startups and SMEs under the IFSCA framework — signalling that the route is intended to be accessible, not just for large conglomerates, but for growth-stage companies with existing institutional shareholders seeking global visibility. International Financial Services Centres Authority
What the Framework Will Cover — Based on Regulation 40’s Architecture
While the detailed operational circular is pending, we can map what the framework is expected to address, based on what Regulation 40 itself provides and what comparable mechanisms in other IFSC-type jurisdictions require.
Eligibility. The framework will specify which entities can pursue a listing without public offer. For IPOs under the same regulations, an issuer must have operating revenue of at least USD 20 million in the last financial year, a pre-tax profit of at least USD 1 million, or a post-issue market capitalisation of at least USD 25 million. The Regulation 40 framework may carry similar or lighter thresholds, given that no public capital raising is involved.
Minimum Public Shareholding. A key amendment to the IFSCA Listing Regulations reduced the minimum public shareholding requirement for companies listing in IFSCs from 25% to 10%. This is significantly more lenient than domestic listing requirements and is important for promoter-heavy cap tables typical of Indian family businesses and PE-backed companies.
Accounting Standards. Companies reporting under IFRS, Ind AS, or US GAAP will all be accommodated. This matters particularly for foreign-incorporated issuers or Indian companies that have already adopted IFRS for international reporting.
Disclosure Obligations. Post-listing, listed entities will be subject to continuous disclosure requirements under Chapter XII of the Listing Regulations. Notably, the disclosure framework requires half-yearly financial statements rather than quarterly — a meaningful compliance reduction compared to domestic listed entities.
FDI Treatment. This is a layer that catches companies off-guard. All investments in shares listed at GIFT IFSC exchanges are treated as foreign direct investment under FEMA. Companies must stay within FDI sectoral caps and avoid sectors where FDI is prohibited. If your company operates in a sector with a 49% or 74% FDI cap, your post-listing shareholding structure needs to be carefully modelled before you proceed.
What a Direct Listing at GIFT IFSC Is — and Is Not
A common mistake we see promoters make is conflating the different listing routes available at GIFT IFSC. Let us be precise.
It is not a fundraise. Zero capital enters the company through the listing itself. If you want to raise capital, that would require a separate IPO or preferential issue process — a distinct track entirely.
It is not an IPO. There is no offer document, no subscription process, no allotment, no book building, no anchor investors, no minimum subscription requirements.
It is not a secondary listing. A secondary listing at GIFT IFSC is for companies already listed on a recognised foreign exchange who want an additional listing at GIFT. Regulation 40 is for primary listing of shares that are not yet publicly traded.
It is not an overseas listing. GIFT IFSC sits within India’s territorial and regulatory perimeter. FEMA, Companies Act, and IFSCA rules all apply. This is not the same as listing on NYSE or LSE.
It is not yet operationally live. Regulation 40 exists. The framework circular is expected in June 2026. The window opens when that circular lands.
Who Should Be Watching This Space?
If you fall into any of the following categories, the Regulation 40 framework deserves serious attention as it approaches operationalisation:
PE and VC-backed companies with multiple institutional shareholders who want a path to liquidity without a domestic IPO. A listing without public offer creates a tradeable market for existing shares — existing investors can transact, price discovery happens, and the company gets global visibility without dilution.
Promoter-led Indian companies with international business ambitions. A GIFT IFSC listing creates a foreign currency-denominated market cap, which is useful in cross-border M&A, partnership discussions, and employee incentive structures.
Foreign companies seeking a regulated India-linked listing to access domestic and NRI investor pools without the full burden of a SEBI-regulated domestic listing.
Family businesses transitioning toward institutional governance. The lighter compliance burden at GIFT IFSC — half-yearly reporting, 10% minimum public shareholding — makes it a manageable first step toward a listed structure.
The Tax Architecture: Why GIFT IFSC Is Structurally Advantaged
The listing benefit at GIFT IFSC is amplified by its tax architecture. Entities operating in GIFT IFSC enjoy 100% income tax exemption for 20 consecutive years out of 25 years, exemption from GST and Customs on services rendered to service providers in GIFT IFSC/SEZ units, and no Securities Transaction Tax (STT), Commodity Transaction Tax (CTT), or stamp duty on trades.
For global investors, the absence of STT, CTT, and stamp duty meaningfully reduces the cost of acquiring and trading shares — a structural advantage that domestic exchange-listed shares cannot offer. This is a real pull factor for foreign institutional investors, sovereign wealth funds, and global family offices that are routinely sensitive to transaction cost structures.
What Happens After Listing? The Ongoing Obligations
Once a company is listed under Regulation 40, it steps into the continuous listing obligations framework under Chapter XII of the IFSCA (Listing) Regulations, 2024. These include:
Financial Reporting. Half-yearly financial statements under IFRS, Ind AS, or US GAAP, disclosed within 45 days of the end of the half-year, following board approval. This timeline was specified under the amended regulation 96(2) introduced in October 2025.
Material Event Disclosures. Any price-sensitive information — changes in control, significant transactions, litigation, regulatory actions — must be disclosed promptly to the exchange.
Governance Standards. The IFSCA framework replaces the Indian concept of “promoter” with “controlling shareholder” for foreign companies — aligning with how governance accountability is understood in global markets.
Corporate Actions. Any subsequent capital actions — rights issues, preferential allotments, QIPs — will require separate compliance under the respective chapters of the Listing Regulations. IFSCA issued a circular on April 22, 2026 prescribing the detailed framework for preferential issues and qualified institutions placements under the Listing Regulations — a sign that the post-listing capital market infrastructure is actively being built out.
The June 2026 Framework: What to Do Right Now
If you are a promoter, CFO, or legal counsel evaluating this route, the period between now and June 2026 is not idle time. It is preparation time.
The questions to resolve before the framework lands are:
Structuring questions. Is your company a public company or does it need to be converted? If it is a private company, conversion is a prerequisite under Indian law before any listing — domestic or international.
Cap table analysis. What is your current FDI exposure? Who are your existing shareholders, and what is their residency status? How does the 10% minimum public shareholding requirement interact with your current shareholding?
Financial reporting readiness. Are your financials currently prepared under Ind AS or IFRS? If you are on Indian GAAP, a transition may be required. The quality and audit standard of your financials will matter.
Sector compliance. Does your company operate in an FDI-restricted sector? If so, what is the sectoral cap, and does your anticipated post-listing shareholding structure comply?
Depository arrangements. Shares listed at GIFT IFSC trade in dematerialised form through India International Depository IFSC Limited (IIDI). Your company will need to engage with depository infrastructure ahead of time.
None of these are complex in isolation. But together they take time, and starting six months before the framework notification lands puts you in a position to move quickly when it does.
A Note on the Broader GIFT IFSC Listing Landscape
The Regulation 40 direct listing sits alongside several other capital market routes at GIFT IFSC that are already operational and worth understanding in context.
IPO on GIFT IFSC exchanges — open to unlisted Indian public companies and foreign companies, this involves a public offer, capital raising, and the full IPO process. Operationally live.
Secondary listing — for companies listed on recognised foreign exchanges who want an additional GIFT IFSC listing. Operationally live.
SPAC listings — Special Purpose Acquisition Company frameworks are available for SPAC structures raising at least USD 50 million. Operationally live.
Debt listing — Indian and foreign companies can list debt securities, commercial paper, and certificates of deposit. From April 2025, issuers are required to obtain a credit rating from at least one CRA registered with IFSCA. Operationally live. International Financial Services Centres Authority
The Regulation 40 listing without public offer is the missing piece — the route that gives companies equity market presence at GIFT IFSC without a capital raise. Once the June 2026 framework lands, it completes the suite.
Conclusion: The Permission Exists. The Process Is Coming.
Direct listing at GIFT IFSC — listing without a public offer under Regulation 40 — is a genuinely useful structural tool. It creates international exchange presence, foreign currency price discovery, and a tradeable market for existing shares, all without the company raising a single dollar of new capital.
The regulatory intent is clear. The legal foundation is in place. IFSCA’s track record of moving quickly on implementation — the Listing Regulations were notified in August 2024, amended in October 2025, and the preferential issue framework landed in April 2026 — gives reasonable confidence in the June 2026 timeline.
But the framework is not yet here. Any advisor telling you the route is fully operational today is either confused or conflating it with the IPO route. The distinction matters — and in this space, acting on incorrect information can create real structural and compliance problems downstream.
The right move right now is to understand the architecture, stress-test your eligibility, and have the structural readiness work done — so that when IFSCA releases the framework, you are not starting from zero.
If you are evaluating a direct listing in GIFT IFSC, working through Regulation 40 readiness, or structuring your company ahead of the June 2026 framework notification, feel free to reach out. We advise promoters, PE funds, and CFOs at every stage of the GIFT IFSC listing journey — from initial eligibility assessment through to exchange admission.
FAQs: Direct Listing in GIFT IFSC (Regulation 40)
1. What is a direct listing in GIFT IFSC?
A direct listing under Regulation 40 allows companies to list existing shares on IFSC exchanges without issuing new shares or raising capital. It is purely a listing mechanism for liquidity and price discovery in foreign currency, not a fundraising exercise.
2. Is the direct listing route currently operational in India?
No. While Regulation 40 legally permits listing without a public offer, the detailed operational framework is expected around June 2026. Until then, companies cannot execute a direct listing on IFSC exchanges.
3. How is a direct listing different from an IPO in GIFT IFSC?
An IPO involves issuing new shares, raising capital, book building, and investor subscription. A direct listing has none of these—no capital raise, no dilution, and no underwriting. It simply enables trading of existing shares.
4. Who should consider a direct listing at GIFT IFSC?
PE/VC-backed companies seeking liquidity, promoter-led businesses aiming for global visibility, and foreign companies wanting India-linked listing exposure—all without immediate capital raising—should evaluate this route.
5. What are the key compliance considerations before listing?
Companies must evaluate FDI limits, ensure appropriate corporate structure (public company), align financial reporting (Ind AS/IFRS/US GAAP), and prepare for minimum public shareholding and disclosure requirements post-listing.
6. What are the key advantages of listing at GIFT IFSC?
Benefits include foreign currency trading, lower transaction costs (no STT/stamp duty), lighter compliance (half-yearly reporting), and access to global investors within India’s regulatory framework.
About the Author
Prashant Kumar is a Company Secretary, Published Author, and a seasoned professional in corporate and financial services regulation. He serves as Company Secretary & Compliance Officer at Global Horizons Capital Advisors (IFSC) Private Limited, an IFSCA-licensed Investment Banker based in GIFT City, with direct, on-ground exposure to capital market transactions within the IFSC ecosystem.
He brings hands-on experience in capital markets transactions, IPOs, direct listings, and exchange listings, along with deep expertise in GIFT IFSC structuring, fund setup (FME & AIF), corporate governance, and regulatory compliance—advising fund managers, startups, and institutions on building globally aligned, execution-ready structures.
He can be reached for professional discussions on GIFT IFSC, IPOs, listings, fund structuring, and regulatory strategy at +91 9821008011 or prashant.kumar@global-horizons.in.
