The International Financial Services Centres Authority (IFSCA) on Friday issued the final norms specifying eligibility conditions and norms for direct listing on the exchanges in the GIFT City.
With the final notification in place, the gates of IFSCA will be open for foreign entities and domestic unlisted companies, especially startups eyeing offshore investors, to explore listing on the two exchanges in the financial hub.
To be eligible, the company must have operating revenue of at least $20 million in the previous financial year, pre-tax profit of at least $1million and a post issue market capitalisation of at least $25 million.
Further, a company which has earlier issued SR equity shares or shares with superior voting rights, will also be allowed to launch an IPO of its ordinary shares if the shareholders have approved the issuance of SR equities and such shares have been held for at least three months prior to the filing.
For the offer for sale, the shares must have been held for at least one year before filing the draft documents.
“The final regulations permit unlisted entities and Special Purpose Acquisition Companies (SPACs) to issue initial public offerings on IFSC stock exchanges. It will allow listed entities to issue follow-on public offers, rights issues, or preferential issues,” said Sunil Gidwani, Partner – Financial Services, Nangia Andersen LLP.
“The regulations also allow the listing of various other securities including depository receipts, debt securities, commercial papers, certificates of deposit, and other financial products that may be approved by the IFSCA,” he added.
IFSCA has also specified obligations for those launching a SPAC.
“The issue shall be of size not less than $50 million or any other amount as may be specified by the authority from time to time. The sponsors shall hold at least 15 per cent and not more than 20 per cent of the post issue paid up capital,” noted IFSCA in the chapter for SPAC.
While the regulations allow the listing of all types of securities, domestic market regulator Sebi will have to amend existing regulations before listed companies can list in GIFT City.
“A public Indian company having its equity shares listed on a stock exchange in India may be permitted to make a qualified institutions placement in the manner as may be specified by the Authority from time to time,” the new regulation states.
While the IFSC regulator has most of the other processes in the final norms as per its proposals and similar to those in the domestic market like appointment of lead manager, disclosures, among others, it has specified that observation on the draft documents for IPO will be issued within 21 days.
The Authority will also fast-track follow-on public offers (FPOs) if the issuer meets certain criteria.
Experts said that such a timeline has been kept for faster processing and building a vibrant ecosystem.
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