Finmin Lowers Minimum Public Float Requirement to 10 Percent for Companies Listing on IFSC Bourses

The finance ministry has reduced the minimum public float requirement to 10 per cent from 25 per cent in a bid to attract companies to list on stock exchanges at IFSC, Gandhinagar.

The Gujarat International Finance Tec City (GIFT City) at Gandhinagar is India's first International Financial Services Centre (IFSC) under Special Economic Zone Act, 2005.

The Department of Economic Affairs has amended the Securities Contracts Regulation Rules (SCRR), 1956 to ease the listing requirements for Indian companies seeking to list on international exchanges within International Financial Service Centres (IFSCs) at par with global standards, an official statement said.

Direct listing of equity shares of companies incorporated in India on International Exchanges Scheme under the Foreign Exchange Management (Non-Debt Instruments), 2019 and Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024 together, provide a regulatory framework to enable public Indian companies to issue and list their shares in permitted international stock exchanges at GIFT-IFSC.

To further facilitate this, the new rules stipulate that for Indian companies desiring to list solely on international exchanges in IFSCs, the minimum offer and allotment to the public as per the offer document shall be at least 10 per cent of the post-issue capital.

The continuous listing requirement for such companies has also been set at 10 per cent, as outlined under SCRR, it said.

By reducing these thresholds, the amendments in SCRR facilitate easier access to global capital for Indian startups and companies in the sunrise and the technology sectors, it said.

This will particularly benefit Indian companies going global and having ambitions to look at opportunities for expanding their presence in other markets, it added.

This initiative underscores the government's commitment to providing an agile and world-class regulatory and business environment in the IFSCs, thereby strengthening India's position in the global financial system.

Commenting on the development, Nangia Andersen India Director (regulatory) Mayank Arora said the amendment has been brought about to encourage Indian and Foreign Companies to list their securities in stock exchanges located in IFSC mandating lower dilution of ownership.

"While companies consider multiple factors such as liquidity, cost of listing, regulatory environment, etc. this amendment would certainly nudge Companies (both foreign and domestic) to explore the option of listing on stock exchanges located in IFSCs," he said.

Meanwhile, Reserve Bank Governor Shaktikanta Das earlier this month had said that trading of sovereign green bonds can commence at the International Financial Services Centre in Gujarat during the second half of the current fiscal.

In April, the Reserve Bank of India (RBI) had announced that it will issue a framework to enable trading of sovereign green bonds in GIFT City.

The government has been raising funds through green bonds since 2022-23 and has raised a total of Rs 36,000 crore in the last two years.

So far in the current financial year, the government has raised only Rs 1,697 crore out of the stipulated Rs 12,000 crore scheduled to be raised in the first half ending in September through green bonds, as it did not find favourable bids.