Explained: How Indian Companies Can Get Foreign Capital via GIFT City

New Delhi (ABC Live): Indian public companies can now explore foreign capital through GIFT International Financial Services Centre (GIFT IFSC). They may do so by listing eligible securities on permitted international exchanges. At present, the permitted exchanges are India International Exchange (India INX) and NSE International Exchange (NSE IFSC / NSE IX).

However, this route is not automatic. A company must comply with the Companies Act, 2013, the Foreign Exchange Management Act (FEMA) framework, International Financial Services Centres Authority (IFSCA) listing rules, exchange-level rules and, where applicable, Securities and Exchange Board of India (SEBI) requirements.

Therefore, GIFT City should not be seen as a shortcut. Instead, it should be understood as a regulated international capital-market route from India. Moreover, companies should use this route only after proper legal, financial, tax and foreign-exchange due diligence.

Key Points

Why DSLA Is Publishing This Advisory Now

GIFT City is becoming an important capital-market route for Indian companies that want global investors. Therefore, promoters, start-ups planning public conversion, export-led businesses and technology companies should understand this route before they structure foreign capital.

Moreover, India is trying to bring international financial activity onto Indian soil. Earlier, many Indian companies and investors looked at offshore centres for global capital access. Now, however, GIFT IFSC gives them an Indian international platform.

As a result, Indian companies may get a new route for foreign-currency capital, global investor visibility and wider market access. Nevertheless, this route will help only those companies that are ready for strong compliance, transparent disclosures and global investor scrutiny.

What Is GIFT IFSC?

GIFT IFSC is India’s first International Financial Services Centre. It is located in Gujarat International Finance Tec-City. In simple words, it works like an international financial zone inside India.

IFSCA is the unified regulator for financial products, financial services and financial institutions in IFSC. Therefore, GIFT IFSC is not a normal domestic market. Instead, it is designed for cross-border finance, foreign-currency transactions, international investors and global financial products.

In contrast, normal NSE/BSE markets serve India’s domestic securities market. GIFT IFSC, meanwhile, serves India’s international financial-market ambitions. For this reason, the legal structure, investor base, currency and compliance model are different.

How Can Indian Public Companies Raise Foreign Capital?

An Indian public company may raise foreign capital through GIFT City in several ways. However, the correct route depends on the company’s status, business model, capital need and regulatory eligibility.

Thus, GIFT City is not limited to one method of fund raising. Instead, it offers a wider international capital-market framework. In addition, companies may choose the structure that best matches their capital need, investor base and regulatory position.

Which Exchanges Are Permitted?

At present, the permitted international exchanges are:

Therefore, an eligible Indian public company may examine listing on either India INX or NSE IFSC. However, the choice should depend on commercial strategy, investor base, product type, cost, liquidity expectations and exchange-level requirements.

Moreover, the company should compare both exchanges before taking a final decision. For example, it should check investor reach, listing cost, trading infrastructure, clearing arrangements and market practice.

Who Is Eligible?

The direct equity listing route is meant for public Indian companies. Therefore, a private limited company cannot directly list equity shares under this route.

Therefore, if a private company wants to use this route, it must first convert into a public limited company. However, conversion alone is not enough. The company must also satisfy financial, legal, FEMA, disclosure and exchange requirements.

In addition, the company must check whether its promoters, directors and selling shareholders are eligible. Otherwise, the proposed listing may face regulatory objections at an early stage.

Main Legal Framework

An Indian public company must check several laws before planning a GIFT IFSC listing. Therefore, early legal due diligence is essential.

In addition, the company must check tax law, beneficial ownership restrictions, foreign investment limits and sector-specific rules. Otherwise, the listing structure may face legal or regulatory objections.

Consequently, the company should not treat GIFT IFSC listing as a simple fund-raising exercise. Instead, it should treat it as a full capital-market transaction.

Financial Eligibility for Equity Listing

For an initial public offer in IFSC, the company should check whether it satisfies the financial eligibility conditions under the IFSCA listing framework. Generally, these conditions may include revenue, profit, post-issue market capitalisation or another permitted eligibility route.

Therefore, the company should not begin with publicity or investor outreach first. Instead, it should begin with eligibility review, financial testing and legal due diligence. After that, it should examine valuation, offer size and investor demand.

How Is GIFT IFSC Listing Different From Normal FDI?

Foreign Direct Investment (FDI) and GIFT IFSC listing both bring foreign money into an Indian company. However, they are legally and commercially different.

Therefore, GIFT IFSC listing does not bypass FDI law. Sectoral caps, prohibited sectors, government approval requirements and foreign holding limits still apply.

However, unlike a private FDI deal, an IFSC listing may provide market-based price discovery, wider investor participation and exchange-level liquidity. In addition, it may help the company build a global valuation benchmark.

Why Would Companies Use This Route?

GIFT IFSC listing may help Indian public companies when they need foreign capital, foreign-currency funding and international visibility.

Moreover, this route may suit technology companies, export-led businesses, green energy firms, fintech platforms, Software-as-a-Service companies and businesses with global expansion plans.

However, it may not help companies that lack scale, governance or investor confidence. Therefore, the company must first ask whether foreign investors will actually find its business attractive.

Benefit to Investors

Foreign investors may also benefit from this route. First, they get access to Indian growth companies through an international financial centre. Second, they may trade in foreign currency. Third, they may use an exchange-based route instead of relying only on private FDI deals.

In addition, IFSC exchanges are designed for international market access. Therefore, the route may appeal to global funds, overseas institutions, Non-Resident Indians (NRIs) and investors seeking India-linked exposure through a regulated international platform.

Nevertheless, investors must still check tax treatment, product eligibility, liquidity, foreign investment limits and exit options before investing. Otherwise, a favourable listing structure may still create avoidable financial or legal risk.

Tax Position: Is There a Benefit?

There may be tax advantages, especially for eligible non-resident investors. However, companies should not assume automatic tax exemption merely because they list securities in GIFT IFSC.

For Companies

For an Indian public company, the main benefit is usually capital access and possible global valuation. Listing itself does not automatically convert the company into an IFSC unit. Therefore, it does not automatically grant an IFSC tax holiday.

However, if the company separately opens an eligible IFSC unit and carries on permitted IFSC business, separate tax benefits may be examined. Even then, the company must satisfy the relevant tax conditions.

For Investors

For non-resident investors, the tax position may be more attractive in some cases. However, the result depends on the instrument, transaction, residential status, treaty position and applicable Indian tax law. Therefore, investors and issuers should obtain tax advice before finalising the structure.

Is Opening a GIFT City Unit Necessary?

Generally, opening a GIFT City unit is not compulsory for direct listing of an Indian public company’s equity shares. Listing and setting up an IFSC business unit are separate matters.

However, a company may open a GIFT IFSC unit for business reasons. For example, it may use the unit for treasury, fintech, fund management or financial services. Even then, the unit does not automatically create listing eligibility.

Therefore, a company should not confuse two separate questions:

1. Can the company open a GIFT City unit?
2. Can the company list securities on India INX or NSE IFSC?

Both may support the same business strategy. Nevertheless, each requires separate compliance. Consequently, opening a unit may help the business story, but it does not replace the listing process.

Role of IFSC Exchanges and Clearing Corporations

Listing is not only about the issuer company. Investors also need strong market infrastructure.

The IFSCA Master Circular dated 05 June 2026 consolidates rules for recognised stock exchanges and recognised clearing corporations in IFSC. It covers trading, clearing, settlement, technology, governance, risk management, disaster recovery and reporting. Therefore, when a company lists in IFSC, trading takes place within a regulated exchange and clearing framework.

Consequently, the listing route depends not only on issuer eligibility but also on a trusted exchange, clearing and settlement ecosystem. In addition, strong market infrastructure improves investor confidence.

Step-by-Step Process for an Indian Public Company

Step 1: Check Company Status

First, the company must confirm whether it is private or public. If it is private, it must convert into a public limited company before exploring equity listing.

Step 2: Conduct Eligibility Due Diligence

Next, the company should check filings, net worth, defaults, litigation, promoter status, director status, FEMA restrictions and foreign investment limits.

Step 3: Decide the Capital Route

Thereafter, the company should choose between fresh issue, OFS, debt listing, depository receipts or another permitted product.

Step 4: Appoint Advisers

After that, the company should appoint a lead manager, legal counsel, auditor, company secretary, tax adviser and valuation expert.

Step 5: Prepare Offer Document

Then, the company must prepare an offer document. It should disclose the company’s business, risks, financials, capital structure, promoters, litigation, regulatory issues, use of proceeds and foreign investment restrictions.

Step 6: Apply to India INX or NSE IFSC

Next, the company must apply to the selected IFSC exchange for in-principle approval.

Step 7: File With IFSCA and Complete Compliance

In addition, the company must complete IFSCA filings, exchange filings, Companies Act filings, FEMA checks and other applicable compliances.

Step 8: Complete Issue, Allotment and Listing

After approvals and subscription, the company completes allotment and listing.

Step 9: Maintain Post-Listing Compliance

Finally, after listing, the company must maintain disclosure, governance, financial reporting and investor communication obligations.

Risks and Compliance Concerns

The GIFT IFSC route is promising. However, it is not a shortcut.

Therefore, companies should begin with legal, financial, FEMA and tax due diligence before approaching the exchange. In addition, they should verify current exchange practice, investor demand and post-listing compliance capacity.

Otherwise, the company may complete a technical listing but fail to attract meaningful capital or liquidity.

DSLA Advisory View

The GIFT City route is useful for Indian public companies that want global capital, foreign-currency funding, international visibility and a wider investor base. Moreover, it can help companies that have export revenue, overseas clients or global expansion plans.

However, the route will work only for companies with clean compliance, reliable financials, transparent ownership and credible disclosures. Therefore, DSLA recommends a full pre-listing legal, financial, FEMA and tax due diligence before any company approaches India INX or NSE IFSC.

In addition, companies should assess whether they can meet international investor expectations. Otherwise, the listing may not produce meaningful capital or liquidity.

Conclusion

Indian public companies can raise foreign capital through GIFT City by listing eligible securities on India INX or NSE IFSC. This route gives access to global investors and foreign-currency capital. However, it also requires careful compliance with company law, FEMA, IFSCA listing rules, exchange requirements and SEBI norms where applicable.

In simple words, GIFT IFSC is not a bypass route. Rather, it is a regulated international capital-market route from India.

FAQ

What is the main purpose of GIFT IFSC listing?

It allows eligible Indian public companies to raise foreign capital through India INX or NSE IFSC. Moreover, it gives them access to a wider non-resident investor base.

Can a private limited company list directly?

No. It must first convert into a public limited company. However, conversion alone does not guarantee listing.

Can an unlisted public company list in GIFT IFSC?

Yes, subject to Companies Act, FEMA, IFSCA, exchange and eligibility requirements. Therefore, early due diligence is necessary.

Can an NSE/BSE-listed company list in IFSC?

It may explore the route. However, SEBI-linked operational requirements and domestic listing obligations must be checked.

Is GIFT IFSC listing the same as FDI?

No. FDI is direct foreign investment into a company. In contrast, GIFT IFSC listing is an exchange-based capital-raising route.

Does GIFT IFSC listing bypass FDI rules?

No. Sectoral caps, prohibited sectors, government approval requirements and foreign holding limits still apply. Therefore, FEMA review remains necessary.

Is opening a GIFT City unit compulsory?

Generally, no. Opening a GIFT City unit and listing securities on India INX or NSE IFSC are separate matters. However, both may support the same international business strategy.

Is there a tax benefit?

There may be tax benefits for eligible investors and specific transactions. However, the company and investors must check the tax position separately before proceeding.

DSLA–ABC Live Note

This advisory is prepared by Dinesh Singh Law Associates (DSLA) for legal awareness and business guidance.

ABC Live publishes it as part of its research-based journalism initiative to make complex legal, financial and public-policy issues simple for readers.

However, this advisory is not a substitute for case-specific legal, tax, FEMA, SEBI, IFSCA or exchange-level advice. Each company must obtain professional due diligence before proceeding with GIFT IFSC listing.

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