India’s capital market is undergoing financial renaissance with the country achieving global leadership in the number of Initial Public Offerings (IPO) in 2024. India accounted for over 25% of all global IPOs in 2024 with 332 offerings significantly outpacing the US at 205 and China at 1301. Although the US has fewer IPOs, it leads with a total IPO value of $35.6 billion, suggesting larger average IPO sizes. India ranks second with $22.7 billion, showing a dynamic but smaller IPO market2.
The robust IPO activity in 2024 reflects the growing confidence of both domestic and international investors in India’s economic trajectory. This momentum is expected to continue, with a strong pipeline of companies preparing to enter the public markets in the coming years.
India is now debuting its first International Financial Services Center (IFSC) located at GIFT City, Gujarat aiming towards becoming a leading hub for inbound and outbound gateway for International Financial Services. It offers a unique platform to access the global as well as Indian economy through a unified regulatory body and regulations carved based on global best practices. GIFT IFSC will boost India’s attractiveness for global capital raising initiatives.
The U.S. IPO market, once a global leader in capital raising, has seen a notable slowdown in recent years. Market volatility, higher interest rates, and tighter regulatory scrutiny have collectively dampened the enthusiasm for initial public offerings. In 2024, IPO activity in the U.S. was down significantly compared to its historical highs, with fewer listings and lower capital raised. The hesitation among companies to go public in the U.S. has created an environment where investors are seeking alternative markets for better opportunities.
GIFT IFSC in India offers a vibrant alternative for both foreign companies and global investors to access the international capital markets. Positioned as India’s premier IFSC, GIFT City offers unique advantages that are attracting global attention.
1. Foreign currency denominated listing for non-Indian companies:
Companies incorporated outside India can list various financial products such as equities, debt securities, depository receipts, SPACs etc. in foreign currency on GIFT IFSC Exchanges (India International Exchange and NSE IX).
2. Favorable regulatory environment:
GIFT City’s unified regulatory framework, overseen by the International Financial Services Centres Authority (IFSCA), simplifies and accelerates the listing process. Companies are only required to comply with the regulations established by the IFSCA, eliminating the need to adhere to additional Indian capital market regulations. Companies have the flexibility to choose among IFRS, US GAAP, or other accounting standards applicable in their jurisdiction of incorporation, ensuring alignment with their existing financial reporting practices.
3. Flexible eligibility criteria:
For IPOs, companies can meet any of the following criteria3:
Revenue Test: A minimum revenue of USD 20 million in the last financial year or an average over the past three years or
Profit Test: A pre-tax profit of USD 1 million over similar timeframes or
Market Capitalization Test: Post-issue market capitalization of at least USD 25 million
4. Global Reach with Local Benefits:
Listing in GIFT IFSC allows companies to tap into international capital while provides a gateway to participate in one of the fastest-growing economies and booming capital markets in the world. The IFSC also enables Indian retail investors to participate in the IPOs of foreign companies, subject to certain restrictions, thereby providing issuers with access to a vast pool of capital.
5. Cost effective listing with minimum lower dilution:
Listing in GIFT IFSC is significantly more cost-effective than in the global jurisdictions, thanks to lower regulatory requirements, compliance costs, reduced listing fees and exemptions in multiple other taxes. Additionally, the IFSC framework allows entities to access foreign capital by offering as little as 10% of their stakes, enabling minimal equity dilution while unlocking significant capital value.
Hence, as the global IPO markets grapple with stagnation, GIFT IFSC presents as an attractive alternative. For issuers, it provides a streamlined path to global capital markets, enhanced valuations, and cost-effective listing. For existing investors, it provides access to a rapidly growing economy with significant exit opportunities to maximize returns on their investments.
If you have any questions or need guidance on navigating the listing process in GIFT IFSC, we are here to help. Our team of experts is equipped to support you every step of the way, from understanding eligibility to ensuring a seamless listing to the public markets. Reach out to us today and let us help you unlock the immense opportunities that GIFT IFSC offers for your company’s growth and success.
