Capital Markets
IFSCA Proposes Direct Listing Framework for Unlisted Firms at GIFT City Stock Exchanges Without IPO
The International Financial Services Centres Authority (IFSCA) has proposed allowing companies to directly list their equity shares on stock exchanges in GIFT City without making a public offer, subject to eligibility thresholds, disclosure requirements, and price discovery mechanisms, according to a consultation paper released July 14, 2026. The framework targets companies that have already raised capital from founders or institutional investors but do not require immediate fundraising, allowing them to enhance visibility, improve corporate governance standards and provide liquidity opportunities for existing shareholders through direct listing.
| Eligibility threshold – Operating revenue | Minimum operating revenue of $20 million |
|---|---|
| Eligibility threshold – Pre-tax profit | Minimum pre-tax profit of $1 million |
| Eligibility threshold – Market capitalisation | Post-listing market capitalisation of $50 million |
| Stock exchange approval timeline | In-principle approval from a recognised stock exchange within 15 days |
| Documentation requirement | Information document reviewed by a registered investment banker, including business risks, capital structure, financial statements, legal disputes, related-party transactions and management information |
| Financial statement currency requirement | At least three years of financial statements prepared under IFRS, US GAAP, Ind AS or equivalent frameworks |
| Foreign issuer shareholding requirement | At least 10% public shareholding after listing |
| Price discovery mechanism | Special pre-open price discovery session conducted on the first day of listing to determine equilibrium market price based on buy and sell orders |
| Consultation comment deadline | August 3, 2026 |
What IFSCA Proposed
The International Financial Services Centres Authority (IFSCA) has proposed a framework allowing companies to directly list their equity shares on stock exchanges in GIFT City without undertaking an initial public offering (IPO), according to its consultation paper dated July 14, 2026. Under the draft framework, issuers that are not listed in India or overseas can list directly if they meet at least one of three financial criteria, such as minimum operating revenue of $20 million, pre-tax profit of $1 million, or a post-listing market capitalisation of $50 million.
The proposed rules aim to provide an alternative listing route for companies that have already raised capital from founders or institutional investors but do not require immediate fundraising, allowing them to enhance visibility, improve corporate governance standards and provide liquidity opportunities for existing shareholders through direct listing.
Regulatory Foundation and Global Precedent
The proposed framework builds on provisions introduced under the IFSCA Listing Regulations, 2024, and is aimed at making GIFT City a more attractive destination for global companies seeking access to international capital markets. Globally, direct listings without a public offer are already permitted on major exchanges such as the NYSE and Nasdaq in the US, the London Stock Exchange, and the Tokyo Stock Exchange, each with defined thresholds around profitability, revenue, market capitalisation, and shareholder base.
The consultation paper cites examples of firms like Spotify, Slack Technologies, Palantir Technologies, Coinbase Global, and Roblox Corporation which have listed through direct listing without public offer in foreign jurisdictions.
Approval Process and Documentation
IFSCA has proposed a simplified approval process under which companies would need to obtain in-principle approval from a recognised stock exchange within 15 days. Following this, issuers would be required to submit an information document reviewed by a registered investment banker. The document would include key details such as business risks, capital structure, financial statements, legal disputes, related-party transactions and management information to help investors make informed decisions.
Companies would need to provide financial statements covering at least three years, prepared under accounting standards such as IFRS, US GAAP, Ind AS or equivalent frameworks. The statements must not be older than six months at the time of filing.
Price Discovery and Valuation
The regulator noted that in the absence of book building process and underwriting arrangement, determining listing price without public offer may have certain challenges. For fair and transparent price discovery, it has proposed that the reference or base price may be determined on the basis of a valuation report by an independent and registered valuer.
A special pre-open price discovery session, akin to call auction mechanism, may be conducted on the first day of listing to determine the equilibrium market price based on buy and sell order for efficient price discovery.
Minimum Public Shareholding and Special Shares
To maintain adequate market liquidity, Indian companies would need to comply with domestic minimum public shareholding requirements, while foreign issuers would be required to maintain at least 10% public shareholding after listing. The fresh proposal also permits firms with superior voting rights (SR shares) to list without an initial public offering, provided such shares were approved by shareholders and held for at least three months prior to filing.
Next Steps: Public Consultation Period
Public comments have been invited up to August 3, 2026. Comments may be sent by email to Shri Apar Patiyat, Assistant General Manager at [email protected] with a copy to Shri Pawan Kumar Chowdhary, Deputy General Manager at [email protected] and Shri Arjun Prasad, Chief General Manager at [email protected] with subject line "Comments on framework for Direct listing without public offer" latest by August 03, 2026. After the consultation closes, IFSCA will deliberate on feedback received and finalize the regulatory framework.
Strategic Context: GIFT City as Capital Raising Hub
The proposed norms are aimed at enhancing the attractiveness of GIFT City as a global capital-raising hub. GIFT City, spread across 886 acres, consists of a Multi-Service Special Economic Zone (SEZ), which has been notified as India's maiden International Financial Services Centre, and an exclusive Domestic Tariff Area (DTA). In 2025, GIFT City secured the top rank in reputational advantage, ranked 40th in fintech, and achieved an overall ranking of 46th in the Global Financial Centres Index (GFCI 37).
Frequently asked questions
Which companies are eligible to directly list under this framework?
Issuers that are not listed in India or overseas can list directly if they meet at least one of three financial criteria: minimum operating revenue of $20 million, pre-tax profit of $1 million, or a post-listing market capitalisation of $50 million.
How is the listing price determined if there is no public offer?
The reference or base price may be determined on the basis of a valuation report by an independent and registered valuer. A special pre-open price discovery session, akin to call auction mechanism, may be conducted on the first day of listing to determine the equilibrium market price based on buy and sell order for efficient price discovery.
What is the timeline for getting stock exchange approval?
Companies would need to obtain in-principle approval from a recognised stock exchange within 15 days.
What documentation is required for direct listing?
Issuers would be required to submit an information document reviewed by a registered investment banker, including business risks, capital structure, financial statements, legal disputes, related-party transactions and management information. Companies would need to provide financial statements covering at least three years, prepared under IFRS, US GAAP, Ind AS or equivalent frameworks, and the statements must not be older than six months at the time of filing.
When will this framework be finalised?
Public comments have been invited up to August 3, 2026. IFSCA will review feedback and complete its regulatory process after the consultation period closes.
How does this differ from a traditional IPO?
Unlike a conventional Initial Public Offering (IPO), where companies issue new shares to raise capital, the proposed framework allows eligible issuers to list equity shares and convertible securities directly on recognised IFSC stock exchanges without issuing additional shares.