🌍 Direct Listing Scheme Explained (2025): How Indian Companies Can List Shares in GIFT City IFSC

📌 Introduction: What is the Direct Listing Scheme?

India's Direct Listing Scheme now allows Indian public companies to list their equity shares directly on international stock exchanges — starting with GIFT City’s India INX and NSE IFSC.

The scheme, backed by FEMA rules and the Companies Act, opens new avenues for Indian companies to raise foreign capital without first listing in India — a major shift designed to attract global investors, boost valuation, and expand access to foreign markets.

Here’s a complete FAQ guide (updated for 2025) covering eligibility, regulations, investor limits, and operational frameworks.

Indian executives review stock listing documents in a high-tech environment, with GIFT City stock exchanges and global market data displayed on digital trading boards in the background

❓ Q1. What is the Direct Listing Scheme?

It permits Indian public companies to list shares directly on international exchanges — without an India listing.

Regulated under:

• Section 23(3) of the Companies Act, 2013

• Schedule XI of FEMA (Non-debt Instruments) Rules, 2019

• Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024
  

Currently applicable only to exchanges in GIFT City IFSC.

✅ Q2. Who is eligible to use this scheme?

Only unlisted public Indian companies can currently participate.

✅ Must NOT be:

• A willful defaulter

• A company under investigation

• In default on public deposits or loans

• A Section 8 or Nidhi company
  

❌ Private companies are not allowed to list under this scheme .

🔍 Q3. Can already listed Indian companies participate?

Not yet. SEBI is finalizing rules for Indian-listed public companies to also list overseas. Until then, the scheme is only for unlisted public companies.

🏦 Q4. What are the approved international exchanges?

Currently, only two exchanges are approved under this scheme — both located in GIFT City:

• India INX (BSE subsidiary)

• NSE IFSC (NSE subsidiary)

These are regulated by IFSCA.

🧾 Q5. What are the key compliance requirements?

Companies must comply with:

• Direct Listing Scheme (FEMA)

• Companies Listing Rules, 2024

• IFSCA (Issuance and Listing of Securities) Regulations, 2021

• MCA’s e-Form LEAP-1 for filing prospectus (within 7 days of submission to exchange)

• Other Indian laws: SEBI, Companies Act, PMLA
  

🌐 Q6. Who can invest in these listed shares?

✅ Permissible Holders — i.e., non-residents, including:

• NRIs

• Foreign institutional investors

• Foreign companies or individuals
  

❌ Indian residents and mutual funds are not allowed to invest under this scheme.

📌 Entities from land-bordering countries must get prior Government of India approval.

🔁 Q7. Can existing shareholders offer shares for sale?

Yes. Offer for Sale (OFS) is allowed for existing shareholders during a direct listing.

💸 Q8. Does this count as foreign investment?

Yes. All investments through this scheme are treated as foreign direct investment.

🛑 Companies must stay within FDI sectoral caps and avoid sectors where FDI is prohibited.

🧾 Q9. Are domestic listing and international listing both required?

No. Indian companies can list only internationally (on GIFT City IFSC exchanges) without a domestic listing.

But they may choose to list in both jurisdictions later.

🎁 Q10. What are the incentives for investors?

Foreign investors in GIFT City benefit from:

• No capital gains tax on share sale

• Forex-denominated trades — no currency risk

• 20+ hours daily trading

• Globally aligned listing and disclosure standards

• Regulatory certainty via IFSCA
  

📊 Q11. What’s the benefit for Indian companies?

• Raise capital in foreign currency

• Tap into a wider international investor base

• Improve valuation & brand perception

• Diversify capital sources — INR (India) + USD (Global)

• Avoid complex dual listing at the outset
  

🛡️ Q12. Who regulates this framework?

The International Financial Services Centers Authority (IFSCA) regulates all financial products, services, and institutions in GIFT City IFSC.

It combines the powers of:

• RBI

• SEBI

• IRDAI

• PFRDA
  

🏗️ Q13. What infrastructure exists in GIFT City for direct listing?

• Stock Exchanges:

  • India INX

  • NSE IFSC

• Clearing Corporations:

  • India International Clearing Corp (IFSC)

  • NSE IFSC Clearing Corp

• Depository:

  • India International Depository IFSC Ltd

• Banking Network:

  • Multiple Indian and international banks already operational in GIFT City
    

📌 Conclusion: Direct Listing = Global Capital Meets Indian Innovation

India’s Direct Listing Scheme marks a pivotal shift in enabling capital globalization for Indian companies. It empowers startups, scale-ups, and large enterprises to access international markets without the complexity of dual listing.

And with GIFT City IFSC providing tax benefits, investor incentives, and seamless regulatory support — this scheme offers unmatched strategic advantage.

📩 Need support with listing preparation, FEMA compliance, or regulatory Partner with GIFT CFO — your expert guide for IPO readiness, IFSC onboarding, and direct listing advisory.