International Financial Services Centres Authority (IFSCA)

Section 3(1)(d) of the International Financial Services Centres Authority Act, 2019 defines “Financial product” as

(i)Securities;

(ii)Contracts of insurance;

(iii)Deposits;

(iv)Credit arrangements;

(v)Foreign currency contracts other than contracts to exchange one currency for another that are to be settled immediately; and

(vi)Any other product or instrument that may be notified by the Central Government from time to time.

Financial Products as notified by the Central Government from time to time are as under:

(i)Aircraft lease including operating and financial lease and any hybrid of operating and financial lease of aircraft or helicopter and engines of aircraft or helicopter or any other part thereof

(ii)Bullion spot delivery contract

(iii)Bullion depository receipt with underlying bullion

(iv)Operating lease including any hybrid of operating and financial lease of such product or equipment as financial product

(v)Ship lease including operating lease, and hybrid of operating and financial lease, of a ship or ocean vessel, engines of ship or ocean vessel, or any other part thereof, as a financial product.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2025, Q. 2A(iv) (Syllabus 2022).

a)In terms of Regulation 50 of the International Financial Services Centres Authority (Issuance and Listing of Securities) Regulations, 2021, the start-up fulfilling the following criteria shall be eligible to list on the recognised stock exchanges in IFSC, with or without making a public offer:

(a)The offer document of the company should be filed within a period of ten years from the date of incorporation/ registration;

(b)The annual turnover of the company for any of the financial years since incorporation/ registration should not have exceeded USD twenty million; and

(c)The company is working towards innovation, development or improvement of products or processes or services, or it is a scalable business model with a high potential of employment generation or wealth creation.

b)The salient features for the framework for listing of start-up and SME companies related to listing of Direct Listing and Minimum subscription are as follows:

Direct Listing

The start-ups and SMEs are permitted to list on the recognised stock exchanges in IFSC without public offer. This would encourage start-ups (including Fintech companies) to list in IFSC and would be a step towards developing IFSC as a hub for Fintech companies. Regulation 55 of the IFSCA (Issuance and Listing of Securities) Regulations, 2021 states that the company shall file the information document along with the prescribed fees. The lead manager(s) shall submit a due diligence certificate along with the information document. The issuer shall simultaneously file the information document with the recognised stock exchange(s).

Minimum subscription

Regulation 63 of the International Financial Services Centres Authority (Issuance and Listing of Securities) Regulations, 2021 requires the minimum number of subscribers as 50 or as may be satisfied by the IFSC Authority and that at least 75% of the offer size should be subscribed for the offer to be successful.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 2A(i) (Syllabus 2022).

The establishment of The Gujarat International Finance Tech-city (GIFT)-IFSC, under Section 18 of the Special Economic Zones Act, 2005, will boost the growth of country and GIFT-IFSC is an important gateway to connect India with global opportunities. The benefits Indian economy will have, from an IFSC are as under:

1)Internationalization of Rupee – Pathway for calibrated approach to internationalization of domestic currency.

2)Gateway for inbound & outbound Capital Flows – IFSC to serve as a captive centre to procure our own requirement for International Financial Services e.g. Banking, Capital Markets, Insurance etc.

3)Employment Generation – Concentration of financial institutions in IFSC to create middle and high-end job opportunities for professionals (Global in-house Centres, Treasury).

4)Regional Financial Integration – IFSC can enable India to play an important role in regional financial integration and increase global influence.

5)Development of Niche Areas – IFSC to be leveraged for development of niche financial sector activities like Bullion Exchange Aircraft & Ship Leasing.

6)Innovation in Financial Services – IFSC can become a Laboratory for India and the world to test new age financial innovations and technologies (FinTech).

Thus, the setting up and operationalization of India’s maiden IFSC was a bold and historic step which has catapulted India into a 21st century modern, resilient, and sustainable economy.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 2A(iii) (Syllabus 2022).

Globally, IFSCs have assumed prominence in the financial services ecosystem primarily because of three reasons-

1.They have contributed enormously to the growth of international financial transactions,

2.These centres have played a pivotal role in accelerating the pace of financial globalization, and

3.These centres have played an invaluable role in accelerating the socio-economic growth of host countries.

In the last three decades, the world has witnessed unprecedented expansion in global trade and commerce. This global churn was primarily fuelled by the integration of developing countries, especially in Asia with the global financial system. These fundamental changes brought about a paradigm shift in the global economy and created huge demand for international financial services amongst developing countries.

Necessity of IFSC for domestic economy

Onshoring the offshore international financial services : One of the fundamental factors which incentivized India to set up its own IFSC was the fact that as one of the largest and fastest growing major economies in the world, India could no longer afford to play a passive role in the international financial services ecosystem. India had been heavily relying on overseas financial centres for the purchase of international financial services. Therefore, GIFT-IFSC was set up to transform India from being an importer of international financial services to becoming self-sufficient as well as an exporter of international financial services. Thus, the vision was of “onshoring the offshore international financial services”.

India’s economic growth trajectory : More significantly, a vibrant IFSC has the potential to act as a growth catalyst for domestic Indian economy which is striving to become a USD 5 Trillion economy. Services offered in an IFSC, including Banking, Asset Management, Insurance and Capital Markets attract huge amounts of global capital inflows, such inflows can be channelized for the social economic development of India as well as to meet the Sustainable Development Goals -2030. Therefore, the development of an IFSC is an imperative step in India’s economic growth trajectory.

Another driving force for setting up an IFSC within the country was to allow bright young Indian talent especially in finance and information technology field to fully exhibit & showcase their talent and expertise, who hitherto, had to travel and work in overseas financial centres.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 2(c) (Syllabus 2022).

The IFSCA (Issuance and Listing of Securities) Regulations, 2021 enables the following types of listing:

(i)an initial public offer of specified securities by an unlisted issuer;

(ii)a follow-on public offer of specified securities by a listed issuer;

(iii)Listing of specified securities by a start-up company or a SME;

(iv)Secondary listing of specified securities;

(v)An initial public offer of specified securities by a Special Purpose Acquisition Companies (SPAC);

(vi)Listing of depository receipts;

(vii)Listing of debt securities;

(viii)Listing of ESG debt securities; and

(ix)issuance and/or listing of any other securities as may be specified by the Authority from time to time.

Further, the following entities would be eligible for listing of securities on the recognised stock exchanges in IFSC:

(i)A company incorporated in an IFSC;

(ii)A company incorporated in India; and

(iii)A company incorporated in a foreign jurisdiction.

The following entities shall also be eligible in respect of listing of debt securities on a recognised stock exchange, -

(a)any supranational, multilateral or statutory organisation/ institution/agency provided such organization/institution/agency is permitted to issue securities as per its constitution. Provided that the entity is registered or headquartered in India, IFSC or a Foreign Jurisdiction;

(b)any municipality or any statutory body or board or corporation, authority, trust or agency established or notified by any Central or State Act or any special purpose vehicle notified by the State Government or Central Government including for the purpose of raising fund by the issuer to develop infrastructure or SMART city; and

(c)An entity whose securities are irrevocably guaranteed by a Sovereign (India or a Foreign Jurisdiction).

An issuer shall be eligible to list its securities under the IFSCA (Issuance and Listing of Securities) Regulations, 2021 in IFSC only if, -

(a)the issuer is duly incorporated or established according to the relevant laws of its place of incorporation or establishment;

(b)the issuer is operating in conformity with its constitution; and

(c)the listing of securities in IFSC is in accordance with the applicable laws of the jurisdiction of incorporation.

An issuer shall not be eligible to list securities under these regulations if the issuer or any of its promoters, promoter group, controlling shareholders or directors or selling shareholders is –

(a)debarred from accessing the capital market; or

(b)a wilful defaulter; or

(c)a fugitive economic offender.

Listing of specified securities through IPO

An issuer shall be eligible to make an initial public offer only if:

(a)the issuer has an average pre-tax profit, based on consolidated audited accounts, of at least USD one million during the preceding three financial years; or

(b)the issuer has an operating revenue of at least USD 20 million in the preceding financial year;

or

(c)any other eligibility criteria that may be prescribed by IFSCA.

Listing of Start-up and Small and Medium Sized Enterprise (SME) Companies

The start-up fulfilling the following criteria shall be eligible to list on the recognised stock exchanges, with or without making a public offer, in IFSC:

(a)The offer document of the company should be filed within a period of ten years from the date of incorporation/ registration;

(b)The turnover of the company for any of the financial years since incorporation should not have exceeded USD 20 million.

(c)The company is working towards innovation, development or improvement of products or processes or services, or it is a scalable business model with a high potential of employment generation or wealth creation.

A small and medium enterprise company shall be eligible to list its specified securities on a recognised stock exchange, with or without making a public offer, if the annual turnover of the company for any of the financial years since incorporation/ registration should not have exceeded USD fifty million.

Listing of Special Purpose Acquisition Companies (SPAC)

A SPAC shall be eligible to raise capital through IPO of specified securities on the recognised stock exchanges in IFSC, only if:

(a)The primary objective of the issuer is to effect a merger or amalgamation or acquisition of shares or assets of a company having business operations (“business acquisition”);

(b)The issuer does not have any operating business.

Listing of Debt Securities

The following categories of debt securities shall be eligible for listing on recognised stock exchanges in IFSC:

(a)Debt securities issued by issuers incorporated in IFSC;

(b)Debt securities issued by issuers incorporated in India or foreign jurisdiction in any currency other than INR;

(c)Masala Bonds;

(d)Any other debt securities as permitted by relevant authority from time to time.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2024, Q. 2(d) (Syllabus 2022).

The start-up fulfilling the following criteria shall be eligible to list on the recognised stock exchanges in IFSC:

a.The offer document of the company should be filed within a period of ten years from the date of incorporation/ registration.

b.The annual turnover of the company for any of the financial years since incorporation should not have exceeded USD 20 Million.

c.The company is working towards innovation, development or improvement of products or processes or services, or it is a scalable business model with a high potential of employment generation or wealth creation.

In the given case, start-up fulfils the requirements of listing on the recognized stock exchange in IFSC as the turnover of the company are 8, 10, 12, 15, 18 USD Million for last five years since its incorporation which has not exceeded USD 20 Million in any financial year. Further, this start-up is working towards innovation of product and it is in existence for less than 10 years since its incorporation. Therefore, a start-up fulfils the eligibility conditions to list on the recognized stock exchange in IFSC.

Alternate Answer 1(d)

A small and medium enterprise company shall be eligible to list its specified securities on a recognised stock exchange in an IFSC, with or without making a public offer, if the annual turnover of the company for any of the financial years since incorporation/ registration should not have exceeded USD 50 million.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 1(d) (Syllabus 2022).

In accordance with the IFSCA (Listing) Regulations, 2024, a Special Purpose Acquisition Company (SPAC) is eligible to raise capital through initial public offer of specified securities on the recognised stock exchange, subject to the following conditions amongst others:

(i)Issue size: Not less than USD 50 million or any other amount as may be specified by the Authority from time to time. Further, the sponsors shall hold at least 15% and not more than 20% of the post issue paid up capital.

(ii)Minimum Application Size: The minimum application size in an initial public offer of SPAC shall be USD 100,000. Allotment to investors shall be on proportionate basis or discretionary basis, as disclosed in the offer document.

Whereas, in this case, Innovate Corporation Limited is proposing to make IPO worth USD 25 Million which is less than USD 50 Million as required under IFSCA (Listing) Regulations, 2024, hence it is not meeting the first condition. Further, the minimum application size is USD 50,000 which is less than USD 100,000 per application, hence the company is also not meeting the second requirement.

Therefore, under the given scenario, Innovate Corporation Limited is not complying the listing compliances of SPACs under the regulatory provisions.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2026, Q. 2(d) (Syllabus 2022).

(a)In accordance with IFSCA (Listing) Regulations, 2024, SkyBlu Limited, as a Special Purpose Acquisition Company (SPAC), shall be eligible to raise capital through initial public offer of specified securities on the recognised stock exchange(s), only where-

(i)The target business combination has not been identified prior to the IPO;

(ii)The SPAC has the provisions for redemption and liquidation in line with these Regulations;

(iii)The sponsor of the SPAC issuer has a good track record in SPAC transactions, business combinations, fund management or investment banking activities and the same shall be disclosed in the offer document.

Here, sponsor shall mean a person sponsoring the formation of the SPAC and shall include persons holding any specified securities of the SPAC prior to the IPO.

However, SkyBlu Limited, as a Special Purpose Acquisition Company (SPAC), shall not be eligible to raise capital through initial public offer or list specified securities on the recognised stock exchange(s):

If the issuer or any of its sponsors is -

(a)debarred from accessing the capital market; or

(b)a wilful defaulter; or

(c)a fugitive economic offender.

(b)The offer size should not be less than USD 50 million or any other amount as may be specified by the Authority from time to time. Further, the sponsors shall hold at least 15% and not more than 20% of the post issue paid up capital.

(c)The minimum application size in an initial public offer of SPAC shall be USD 100,000.

(d)Maximum acquisition timeline is of 3 years (36 months).

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 2A(iv) (Syllabus 2022).