IFSCA To Unveil Updated Norms For Direct Listing At GIFT City In July

The International Financial Services Centres Authority is set to complete the revision of regulations for direct listing of companies at the GIFT City by early July, announced Chairman K Rajaraman on Wednesday.

Rajaraman said the regulatory body's top decision-making panel will sanction the regulations by the end of June, with official notification expected in early July.

After engaging with multiple users, they discovered the necessity for some adjustments to their regulations. Consequently, over the past two months, they have made revisions to their listing rules, the official said. He, however, did not specify the exact changes that will come out in the revised norms.

He mentioned that even though unlisted companies can currently list on international exchanges, they will soon be able to do so under the updated regulations by August. He added that the Securities and Exchange Board of India needs to make several amendments to its current regulations for already listed companies in order for them to access foreign investments through the GIFT City.

SEBI will take up to three months for making the necessary amendments in its frameworks, he said, adding that the IFSCA has already provided its inputs on the matter.

In the case of already listed domestic companies, the equity issue at IFSCA will be akin to a follow-on public offer, he said, assuring that the IFSCA will clear issuances within a month.

Companies engaged in sectors such as e-commerce and technology startups, or those having headquarters overseas with substantial business in India are expected to look for direct listing and accessing global capital from the IFSCA, he said.

Activities on the direct listing front will also help grow the number of brokerages and merchant bankers at the GIFT City, he said, adding that at present there are 50 brokerages there who primarily trade in the Nifty 50.

The inclusion of India in global bond indices will up the interest in the overseas direct investment route, he said.

To a query on raising sovereign green bonds, Rajaraman said all the decks are now clear between the Reserve Bank of India and IFSCA, and added that it is now up to the government to decide when it plans to undertake the issuance.

Investment in the sovereign green bonds will be in dollars but the paper will be denominated in Indian rupees, he added.

On the proposed merger between India INX and NSE IX being called off, Rajaraman said the authority has been informed of the decision and welcomes the operation of two separate exchanges as it will drive innovation and deliver better services.

Meanwhile, Rajaraman said the IFSCA has authorized IIBX, the bullion exchange at the GIFT City, to launch gold futures and the product will be rolled out in the next 15 days. In a few months, it will also look at launching silver futures, he added.

Since its inception, IIBX, which acts as a spot exchange, has seen trades of 10 tonnes in gold and over 1,000 tonnes in silver, Rajaraman said, attributing the high activity in the latter to the comprehensive economic partnership agreement signed with the UAE.

He also said that the authority expects a lot of Indian companies—who are into offering book keeping, accounting and taxation services—to make best use of the recently announced norms on the subject and operate from the GIFT City, because there is a big demand for such vocations in the West.

(With PTI inputs)