India’s GIFT City is preparing for a game-changing moment — its first equity IPO under the newly approved IFSCA framework. According to Business Standard, multiple unlisted startups, including an ed-tech firm, are finalizing documents to raise USD 10–100 million directly through an IPO in GIFT City. If successful, this will mark the first time Indian unlisted companies can tap global investors in a foreign currency without listing on domestic exchanges like NSE or BSE. Let us understand with our popular QnA Format.

🧾 Key Questions & Answers

1. What is the new ruling that allows unlisted Indian companies to raise funds via IPO in GIFT City?

 In 2024, the International Financial Services Centres Authority (IFSCA) allowed unlisted Indian public companies to raise funds by directly listing on GIFT City-based international exchanges (like NSE IFSC or India INX). These IPOs are conducted in foreign currencies (usually USD) and do not require listing on NSE/BSE.

2. Who can invest in these IPOs?

 Eligible investors include:

• NRIs (Non-Resident Indians)

• Resident Indians (under RBI’s LRS route, up to USD 250,000/year)

• Foreign Portfolio Investors (FPIs)

• Qualified Institutional Buyers (QIBs)

• Family Offices and Global HNIs

Investors must open a GIFT City-compliant demat & trading account with a registered IFSC broker.

3. Can normal retail or HNI investors from India invest in these IPOs?

Yes, both retail and HNI investors from India can invest, but only through the Liberalised Remittance Scheme (LRS), which allows up to USD 250,000 per year to be remitted abroad for investments. The process requires a foreign currency trading account and KYC through an IFSC-registered broker.

4. How is listing via IPO in GIFT City different from raising funds through a foreign PE/VC investor?

5. What are the advantages for an unlisted company to do an IPO in GIFT City?

 Key benefits include:

• Access to global capital in USD

• Lower compliance burden compared to SEBI’s mainboard

• Faster listing window (as short as 1 day)

• Only 10% minimum public float required (vs. 25% on NSE/BSE)

• Tax incentives for issuers and investors in the IFSC zone

• Builds valuation and brand ahead of potential domestic IPO

6. If a company lists in GIFT City, can it also trade on NSE/BSE in the future?

 Not directly. Currently, GIFT City listings are independent of domestic exchanges. However, a company can later do a separate IPO in India and list on NSE/BSE, subject to SEBI approval.

There is no automatic migration, but GIFT City listing can act as a pre-listing valuation benchmark for future India listings.

7. If this model succeeds, will it impact PE/VC business in India?

 Potentially, yes. If GIFT City listings scale up, companies may prefer market-based pricing and retail participation over traditional PE/VC rounds. This can lead to:

• Increased valuation transparency

• Faster liquidity options for founders

• Reduced dependency on PE-dominated term sheets

• Disintermediation of early-stage capital (especially in mid-stage startups)

However, PE/VC firms will still play a critical role in pre-IPO funding and mentoring.

Final Thoughts

The move to allow IPOs in GIFT City marks a paradigm shift for India’s startup and private equity ecosystem. For the first time, unlisted Indian companies can access global capital directly through an offshore IPO platform — potentially democratizing access and increasing market depth.

The coming months will be crucial in determining whether this model becomes a scalable alternative to traditional IPOs and VC funding routes.