IPOs to hit GIFT City stock exchanges after IFSCA regulations
IPOs to hit GIFT City stock exchanges after IFSCA regulations
The year could mark a turning point, as several companies prepare to go public
Recently, the International Financial Services Authority (IFSCA) had initiated Listing Regulations for direct listing. While these provisions clarified the framework, some procedural challenges delayed the first set of filings.
However, momentum is picking up, and early movers are actively engaging with the National Stock Exchange IX (NSE International Exchange IX) and India International Exchange (India INX), the two international stock exchanges housed in the Gujarat International Finance Tec-City (GIFT City).
Market watchers believe that once the first few IPOs open, the pipeline will expand as confidence in the listing process grows.
At least three to four companies are in the advanced stage of drafting their documents for filing. If these issues move forward and secure approvals, it will be the first time that companies raise funds through initial public offerings (IPOs) at GIFT City, which until now has largely been limited to derivatives trading.
Meanwhile, the most visible progress so far has come from Mumbai-based XED Executive Development Ltd, which became the first company to file its draft red herring prospectus (DRHP) with both NSE IX and India INX.
Founded in 2018, the company has built a strong reputation in senior executive training and collaborates with leading institutions such as Cornell University. XED described itself as a global provider of executive education with operations across Singapore, the US, Abu Dhabi and Saudi Arabia.
The company is aiming for a USD 12 million IPO. Of this, USD 9.6 million will be through fresh issue and 2.4 million dollars, an offer for sale (OFS) by the promoter. XED outlined that the proceeds will be utilized for technology upgrades, working capital, IPO expenses and general corporate purposes, including possible acquisitions.
It reported revenue of USD 4.59 million in FY 2025, marking a 15 percent rise over the previous year.
While Singapore accounted for more than half of the revenue, India contributed 41 percent. The remaining came from Saudi Arabia and the US.
Commenting on the development, Viral Mehta, Lead, M&A and Private Equity Practice at Nishith Desai Associates, stated, “XED’s proposed listing under the GIFT IFSC legal framework marks a significant milestone signalling increasing avenues to access global capital, thereby bolstering the GIFT framework’s overall credibility.”
On 30 August 2024, the IFSCA issued the Listing Regulations, allowing companies incorporated in India, entities set up within an IFSC, and those from the Financial Action Task Force (FATF)-compliant foreign jurisdictions, to list their securities.
The Regulations set out general eligibility requirements such as incorporation in accordance with the home jurisdiction’s laws, conformity with the company’s constitution, and compliance with rules governing the issuance of securities in the respective jurisdiction.
Additionally, the Regulations specified thresholds for IPO eligibility.
It stated that an issuer must have an operating revenue of at least USD 20 million in the last financial year or an average over the past three years, along with a pre-tax profit of at least USD 1 million in the same period.
Moreover, the company’s post-issue market capitalisation must be a minimum of USD 25 million. The issue size cannot be less than USD 50 million, with a pre-IPO sponsor subscription of either USD 10 million or at least 2.5 percent of the total issue size. Post listing, sponsors were required to hold between 15 percent and 20 percent of the issued capital. The Regulations also mandated that the minimum application size for investors would be USD 100,000.
Mehta highlighted that from a legal standpoint, the IPO process under the GIFT IFSC regime held strong significance for India’s capital markets.
He further explained that, unlike the Securities and Exchange Board of India (SEBI’s) framework, which primarily taps domestic investors, “the GIFT IFSC framework is primarily targeted to attract Non-Resident Indians and foreign nationals to access capital.”
He added that the distinction made the regulatory environment unique, offering Indian companies a potential pathway to access international capital pools while remaining within India’s jurisdiction.
Similarly, Raheel Patel, Partner at Gandhi Law Associates, stated that while the IFSCA Regulations offered issuers speed and flexibility, it also posed challenges, as the regime was untested and companies must carefully navigate the Federal Emergency Management Agency (FEMA) and IFSCA’s eligibility requirements.
He added that IFSCA’s handling of the XED IPO would determine whether GIFT could stand alongside Singapore and Dubai as a credible listing hub.
Meanwhile, for Indian resident individuals, the only available route to participate in GIFT City IPOs is the Liberalised Remittance Scheme (LRS).
Introduced by the Reserve Bank of India (RBI), the LRS allows individuals to remit up to USD 250,000 per financial year for varied permitted purposes. These include overseas education, travel and tourism, medical treatment, and investments in shares, mutual funds (MFs), debt instruments, and real estate.
In relation to GIFT City, the LRS route provides a convenient pathway for retail investors to directly take part in IPOs.
As per the RBI, investments in equity or debt through LRS rose 12.45 percent year-on-year to USD 1.70 billion in 2024-2025. Of the overall investments routed via GIFT City, 85 percent was directed towards India.
For non-resident Indians (NRIs), foreign nationals, and overseas institutional investors, access to GIFT City IPOs is more direct. Since securities listed on NSE IX and India INX are denominated in freely convertible foreign currencies, NRIs can invest without the restrictions that apply to participation in Indian domestic markets.
Unlike Indian residents, they are not bound by the LRS ceiling of USD 250,000 per year. Their participation is governed by foreign exchange regulations and KYC compliance norms applicable to global investors.
Explaining further, Alay Razvi, Managing Partner, Accord Juris, said that XED’s IPO marked a precedent. It set a move for India by leveraging the GIFT IFSC framework for equity listings and represented the country’s effort to establish itself as a global financial hub.
He pinpointed that under IFSCA, GIFT IFSC provided more flexibility, lighter disclosure requirements, tax exemptions and incentives. However, issuers could still face legal uncertainties around investor protection and liquidity.
Kunal Sharma, Founder & Managing Partner, Taraksh Lawyers & Consultants says that XED’s IPO creates a compliant pathway under FEMA for domestic entities to access international capital in foreign currencies while under Indian oversight. This enhances liquidity, reduces reliance on volatile FPIs and positions GIFT alongside Dubai and Singapore as a competitive hub.
