TV Mohandas Pai to chair panel to boost direct listing at Gift City

The committee will also advise on scaling global debt market in Gift City

The International Financial Services Centres Authority (IFSCA) has formed a committee for the development of the primary market and direct listings at Gift City. The committee will be chaired by TV Mohandas Pai, former CFO and board member of Infosys.

The 21-member committee has representatives from the Finance Ministry, investment banking, mutual funds, IFSC exchange, and legal players.

The committee has been tasked with helping in the roadmap for direct listing of Indian companies on the IFSC exchanges, introducing new financial instruments for capital raising, scaling up the global debt market in the IFSC, among others.

In January, the government permitted direct listing of domestic companies on the exchanges in Gift-IFSC. The step is expected to give a push to start-ups and new-age companies to access global capital.

The move will enable start-ups and other domestic companies to raise capital in foreign currency, seek better valuation at global standards, and increase the investor base with foreign inflow.

Both listed and unlisted public domestic companies will be able to issue and list their shares on the IFSC exchanges.

Currently, the framework allows unlisted public Indian companies to list their shares on the international exchange, while the Securities and Exchange Board of India (Sebi) is in the process of issuing the operational guidelines for listed public Indian companies.

Industry players have highlighted initial hiccups with a lower investor base and limited players for the ecosystem registered in IFSC. Some have even advocated for allowing domestic mutual funds to participate to bring liquidity.
 

However, key stakeholders in the IFSC have begun efforts to make direct listing at Gift City work with engagements with investment bankers and issuers.

Experts said the IFSC route will reduce currency risk and also help save on various capital market taxes – such as securities transaction tax, stamp duty – levied on onshore trades.