Minimum public float requirements eased for IFSC listing; check details

The Finance Ministry has eased the minimum public float requirements for companies eyeing a debut at the International Financial Services Centre (IFSC).

The Department of Economic Affairs, a wing under the ministry, has "amended the Securities Contracts Regulation Rules (SCRR), 1956 to ease the listing requirements" for Indian companies seeking to list on international exchanges within the IFSC, a government release stated on Thursday, August 29.

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

What has changed?

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% of the post-issue capital". Presently, firms listed on the local bourses are required to maintain a minimum public float of 25%.

"The continuous listing requirement for such companies has also been set at 10%," the release added.

How will the easing of norms help?

The changes will make IFSC listing more attractive for companies, analysts said. This will encourage Indian and foreign companies to list their securities in stock exchanges located in IFSC mandating lower dilution of ownership, said Nangia Andersen India Director (regulatory) Mayank Arora.

"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 told news agency PTI.

According to the official statement, the amendments have been introduced by the Department of Economic Affairs to bring the requirements "at par with global standards".