Overview: The Securities and Exchange Board of India and the International Financial Services Centres Authority are actively collaborating to build a dual-listing mechanism for international stock exchanges operating out of GIFT City – Gujarat International Finance Tec-City. This initiative aims to allow listed Indian corporations to issue dollar-denominated equities to foreign investors whilst maintaining their primary domestic listings.
Companies operating within GIFT City may be in line for a significant boost, following pivotal joint discussions between the Securities and Exchange Board of India (SEBI) and the International Financial Services Centres Authority (IFSCA).
Business Standard, quoting market sources, has reported that regulatory bodies and institutional stakeholders are actively hammering out an operational framework to facilitate dual-listing capabilities for listed Indian corporations on GIFT-IFSC international stock exchanges (such as India INX and NSE IX).
This initiative seeks to allow domestic enterprises to directly tap foreign capital pools in hard currencies whilst retaining their existing domestic listings. By addressing regulatory, surveillance, tax, and minimum public shareholding nuances, the framework seeks to position GIFT IFSC as a vibrant international venue for capital raising.
Dollar-Denominated Foreign Capital Access
Under the proposed legal framework, domestic listed entities would be permitted to raise equity capital from non-resident investors and institutional funds within the GIFT IFSC ecosystem.
All trading and settlement functions on the international exchange will operate in foreign currencies, primarily the US dollar. Domestic Indian retail investors may be restricted from trading these foreign-currency assets on GIFT IFSC trading desks to ensure market stability and adherence to foreign exchange parameters.
Harmonising SEBI and IFSCA Regulatory Norms
A primary focus of these regulatory roundtables is aligning SEBI’s domestic legal mandates with IFSCA’s offshore oversight structure. Authorities are scrutinising potential adjustments to SEBI’s listing obligations and disclosure requirements – Listing Obligations and Disclosure Requirements, prohibition of insider trading rules, share buyback guidelines, and takeover codes. The overarching goal is to construct a transparent regulatory bridge that eliminates double compliance burdens whilst safeguarding cross-border investor protection.
Addressing Public Float Limits and Valuation Disparities
A crucial issue currently under evaluation involves Minimum Public Shareholding (MPS) compliance. Under Indian securities regulations, listed firms must maintain a minimum 25 per cent public float. Regulators are assessing whether shares issued or traded via GIFT IFSC will count towards this statutory threshold.
Simultaneously, price discovery mechanisms are being designed to prevent sharp valuation divergences between domestic exchanges (NSE/BSE) and the GIFT IFSC platform.
Cross-Border Surveillance, Custody, and Tax Rules
To track cross-border capital flow and maintain trading integrity, institutional custodians based in GIFT City will oversee asset movements and equity tracking. Concurrently, regulators are liaising with the Ministry of Finance to formalise straightforward tax directives. The objective is to ensure that dual-listing structures remain commercially viable and tax-efficient when measured against international financial centres such as London or Singapore.
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Author Bio
Setindiabiz Editorial Team is a multidisciplinary collective of Chartered Accountants, Company Secretaries, and Advocates offering authoritative insights on India’s regulatory and business landscape. With decades of experience in compliance, taxation, and advisory, they empower entrepreneurs and enterprises to make informed decisions.
