An expert committee set up by the International Financial Services Centres Authority (IFSCA) has recommended introducing mortgage REITs (mREITs) in GIFT IFSC to provide an alternative channel for real estate financing and support the development of securitisation markets. Unlike conventional REITs, mortgage REITs focus on providing financing for real estate rather than owning real estate projects, operating more like fixed-income managers by earning through interest on mortgage-backed securities (MBS). The investments of mREITs are secured by the real estate assets provided as collateral against the loans, with the report highlighting that several other countries, including the United States, Canada, Australia and the United Kingdom, already have mortgage REITs. The committee, chaired by Ananta Barua, former whole-time member of the Securities and Exchange Board of India (Sebi), has also outlined potential for 'mixed' and 'global' REITs, which would allow asset owners to pool multi-jurisdiction portfolios and offer diversified exposure to a wider set of investors.
The International Financial Services Centres Authority (IFSCA) has proposed allowing companies to directly list their equity shares on stock exchanges in GIFT City without making a public offer, subject to eligibility thresholds, disclosure requirements and price-discovery mechanisms. According to the consultation paper released on July 13, 2026, this framework operationalises provisions under the IFSCA Listing Regulations, 2024, which allow listing without a public offer, and is aimed at enhancing GIFT City's attractiveness as a global capital-raising hub. The IFSCA, as a unified regulator, is headquartered at GIFT IFSC and provides a sound regulatory environment through a single window clearance system, having unified powers previously held by four separate regulators: the Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India, and Pension Fund Regulatory and Development Authority of India.
Under the draft framework, issuers that are not listed in India or overseas can list directly if they meet at least one of three financial criteria: minimum operating revenue of $20 million in the latest financial year (or on average over the previous three years), pre-tax profit of $1 million, or post-listing market capitalisation of $50 million. As reported by The Hindu BusinessLine, the market capitalisation threshold is double the $25 million requirement prescribed for companies undertaking a public offer in the IFSC, with IFSCA stating this higher threshold is intended to address concerns around liquidity and price discovery. The regulator noted that listings without a public offer may present additional challenges in achieving adequate liquidity and price discovery due to the absence of fresh issuance and broad-based distribution.
The committee has recommended enabling Sebi-registered REITs and InvITs to access GIFT IFSC exchanges through depository receipts and dual/secondary listings, which may require Sebi to enable the mechanism in consultation with IFSCA. This would provide domestic REITs and InvITs access to a wider global investor base, including NRIs and international institutions, while simultaneously creating a strong foundation for the development of the REIT/InvIT ecosystem in GIFT IFSC. The committee has also recommended providing tax parity between IFSCA-registered and Sebi-registered REITs and InvITs by amending the definition of 'business trust' under the Income-tax Act, 2025. Additionally, it recommends amending Schedule V (Sl. No. 3) to exempt foreign-sourced income from offshore investments in the hands of non-resident unitholders, bringing it on a par with Category I and II AIFs. Among the key suggestions are an exemption for investments made by IFSC REITs and InvITs in Indian equities from sectoral caps and the three-year lock-in requirement under the automatic route.
IFSCA has outlined a streamlined approval process requiring companies to seek in-principle clearance from a recognised stock exchange within 15 days. According to the consultation paper, the issuer must then file an information document, vetted by a registered investment banker, containing material disclosures to enable informed investor decisions. The document will include details such as risk factors, capital structure, financial statements, litigation, related-party transactions and management information, with financial statements covering at least three years and no older than six months. Unlike a conventional IPO, issuers will not publish an offer document but will instead file an information document through an IFSCA-registered investment banker, who will be required to undertake due diligence and certify that the disclosures are true and adequate.
In designing the framework, IFSCA studied listing regimes in major global markets, including the New York Stock Exchange, Nasdaq, the London Stock Exchange and the Tokyo Stock Exchange, where direct listings are already permitted. The regulator cited companies such as Spotify, Roblox, Coinbase, Wise and Palantir Technologies as examples of businesses that have used the route. However, global experience has been mixed, with companies such as Spotify and Coinbase demonstrating that direct listings can provide liquidity without fresh capital raising, while several smaller issuers have struggled with low trading volumes and limited liquidity. IFSCA has invited public comments on the proposed framework until August 3, 2026, after which it is expected to finalise the regulations. The proposal comes as IFSCA looks to broaden avenues for equity listings in GIFT City after the jurisdiction's first IPO attempt failed to take off, with XED Executive Development withdrawing its maiden IPO citing muted investor participation.
