IFSC framework for preferential allotments and QIPs: Practical guide for listed entities

The International Financial Services Centres Authority has, through Circular No. F. No. IFSCA-PLNP/16/2024-Capital Markets dated April 22, 2026, rolled out a dedicated framework governing preferential issues and qualified institutions placement (QIP) under the International Financial Services Centres Authority (Listing) Regulations, 2024 (“Listing Regulations”).

This framework is designed specifically for entities whose specified securities are listed only on recognised stock exchanges in an International Financial Services Centre (IFSC). It covers eligibility, pricing, payment terms, disclosure obligations, lock-up requirements and issuance mechanics for both preferential issues and QIPs.

Below is a structured, practice-oriented restatement of the circular for quick application by issuers, investment bankers and other stakeholders.

Important
The circular is immediately effective from April 22, 2026 and is issued under sections 12 and 13 of the International Financial Services Centres Authority Act, 2019 read with regulations 57 and 130 of the Listing Regulations.

1. Regulatory backdrop and scope

1.1 Linkage with Listing Regulations, 2024

The Listing Regulations establish the overall regime for listing specified securities, debt securities, depository receipts and other permitted financial products on recognised IFSC stock exchanges.

Regulation 57 of the Listing Regulations permits a listed entity to undertake:

  • a preferential issue, or
  • a qualified institutions placement (QIP),

subject to compliance with conditions that the International Financial Services Centres Authority (“Authority”) may separately prescribe.

The April 22, 2026 circular is that operative prescription, laying down the procedural and substantive terms for raising capital through these two routes.

1.2 Applicability of the circular

The circular expressly applies to:

  • Listed entities whose specified securities are listed exclusively on recognised stock exchange(s) in an IFSC.

It does not extend to:

  • Issuers that hold only a secondary listing on an IFSC stock exchange.

Issuers and advisors must therefore first determine the nature of listing (primary vs secondary) before invoking this framework.

2. Core definitions under the circular

The circular introduces and reaffirms specific expressions that have operational impact.

2.1 Preferential issue

A “preferential issue” is defined as:

An issue of specified securities by a listed entity to one or more identified persons on a private placement basis, in line with the requirements of this circular.

In practice, this is a targeted issuance (for example, to strategic or financial investors) rather than a public or rights issue.

2.2 Qualified institutional buyer

The term “qualified institutional buyer” covers a broad institutional universe, including:

  • Retail or non-retail scheme or venture capital scheme, by whatever designation, that is regulated by a regulator in India, IFSC or a foreign jurisdiction;
  • Public financial institution;
  • Bank;
  • Non-banking financial company supervised by a regulator in India, IFSC or a foreign jurisdiction;
  • Multilateral or bilateral development financial institution;
  • Sovereign wealth fund;
  • State industrial development corporation;
  • Insurance company;
  • Provident fund;
  • Endowment fund;
  • University fund;
  • Pension fund;
  • Accredited investor, other than an individual, as recognised under the International Financial Services Centres Authority (Fund Management) Regulations, 2025;
  • Any additional category as may be notified by the Authority periodically.

These entities constitute the eligible investor universe for a QIP.

2.3 Qualified institutions placement (QIP)

“Qualified institutions placement (QIP)” is defined to mean:

An issue of specified securities to qualified institutional buyers on a private placement basis and also includes an offer for sale of specified securities by promoters or controlling shareholders on a private placement basis.

Thus, QIP can cover both:

  1. Primary issue of new securities by the issuer, and
  2. Secondary sale by promoters/controlling shareholders to qualified institutional buyers.

3. Common conditions for preferential issues and QIPs

3.1 Eligibility linked to recent share transfers

Both preferential issues and QIPs are subject to a specific bar relating to recent equity transactions of the proposed allottee:

  • No preferential issue or QIP can be made to any person who has sold or transferred any equity shares of the issuer within the 30 trading days immediately preceding the relevant date.

The “relevant date” is determined as follows: