Finance Ministry Reduces Minimum Public Float Requirement to Boost Listings at GIFT City
In a move aimed at attracting more companies to list on stock exchanges at the International Financial Services Centre (IFSC) in Gandhinagar, the Finance Ministry has significantly lowered the minimum public float requirement. The new requirement is now set at just 10%, down from the previous 25%. This change is expected to make it easier for companies to go public and benefit from the opportunities offered by the IFSC.
What is GIFT City?
GIFT City, or Gujarat International Finance Tec-City, is India’s first IFSC established under the Special Economic Zone Act of 2005. It is designed to be a hub for international financial services and aims to bring global standards to India’s financial sector.
Why the Change?
The reduction in the minimum public float requirement is part of a broader effort to align India’s financial listing rules with international standards. The Department of Economic Affairs has amended the Securities Contracts Regulation Rules of 1956 to facilitate this change. By lowering the bar for public float, the government hopes to encourage more Indian companies to list on international exchanges within the IFSC.
What Does This Mean for Companies?
Previously, companies needed to have at least 25% of their shares available for public trading to list on exchanges. With the new rule, only 10% is required. This adjustment makes it easier for companies, especially smaller ones, to meet the listing requirements and access the benefits of being part of a global financial hub.
Conclusion
The Finance Ministry’s move to reduce the minimum public float requirement is a strategic step towards enhancing GIFT City’s appeal and competitiveness as an international financial center. By easing the listing requirements, the government is making it simpler for companies to participate in this promising financial landscape, ultimately boosting the growth of India’s financial sector on the global stage.
