GIFT City's ambition to be a share listing hub faced a challenge. XED Executive Development withdrew its IPO after failing to attract enough bids. This withdrawal highlights issues with investor onboarding and participation rules. Experts suggest changes to boost IPO success in Gandhinagar's international finance centre.

XED withdrawal a jolt to listing hub hopes of GIFT City

Mumbai: GIFT City's ambitious plans to become a preferred hub for share listings suffered a setback after last week's withdrawal of XED Executive Development's ₹110 crore Initial Public Offerings (IPOs)-the first issue from India's international finance centre. The pullout, after the offering failing to get enough bids, may prompt prospective issuers to reconsider their listing plans in Gandhinagar, said lawyers and consultants.

XED cited investors' inability to complete their applications due to KYC (Know Your Client)-related issues and subdued institutional participation as the reasons for the withdrawal.

"The withdrawal of the IPO from GIFT IFSC, after seeing limited investor interest, is more a reality check for how the platform can evolve," said Suresh Swamy, partner, Price Waterhouse & Co LLP, GIFT City. "It brings into focus a simple issue: listing today is being asked to succeed without the natural support of resident investors and domestic mutual funds."

Both foreign and Indian companies can raise money via IPOs at GIFT City. Such issues must rely on foreign portfolio investors, NRIs and offshore funds, as retail investors have limited access, said lawyers.

The catch here is that all these investors, including FPIs, NRIs and offshore entities, must complete full KYC with an IFSC-registered broker, including identity, address, and source of funds verification. Entities need additional disclosures on beneficial ownership.

Live Events

"The friction of onboarding requirements like PAN-linked KYC for non-residents and lingering questions around tax treatment, and hesitation is understandable," said Swamy.

Consultants and lawyers said tweaks in investor participation rules in the Gift City could help boost participation in IPOs there.

"Despite regulatory changes in 2025 and early 2026, structural issues persist," said Abhinav Kumar, partner-capital markets at TT&A. "One major hurdle is that Indian residents are not allowed to invest in IFSC IPOs. Because of this, intermediaries have to carry out extra checks to ensure no domestic money enters these issues, making the process longer and more complex than a regular IPO in India."

(You can now subscribe to our ETMarkets WhatsApp channel)

(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

...moreless

(You can now subscribe to our ETMarkets WhatsApp channel)

Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

...moreless

Natural diamonds lose sheen globally, in India they’re still ‘forever’

SpiceJet desperately hunts for lifeline, starts job cuts

How a cozy club controls India’s gold imports

RBI policy: Why high inflation estimates don't mean higher rates

Bold promises vs. hard proof: Indian IT faces an AI test this fiscal