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Informist, Thursday, Jun. 12, 2025

By Sunil Raghu and Pratiksha

AHMEDABAD/MUMBAI – GAIL (India) Ltd. is in the process of following its public sector peers Indian Oil Corp. Ltd. and ONGC Videsh Ltd. and start its treasury operations at International Financial Services Centre located in GIFT City of Gandhinagar, K. Rajaraman, chairman, International Financial Services Centres Authority, told Informist in an informal chat.

So far, among corporates, Indian Oil Corp., Arcelor Mittal Nippon Steel Ltd. and ONGC Videsh have started their treasury operations in GIFT IFSC as IOC Global Capital Management IFSC Ltd., AMNS Global Treasury Centre IFSC Pvt. Ltd., and OVL Overseas IFSC Ltd, respectively. "The idea is that they (corporates) consolidate their balance sheet. It is a no brainer. We have solved the tax problems and treasury centres have a possibility of deemed dividends....so, I am sure more companies will come in due course," IFSCA chairman said.

Through treasury operations at GIFT IFSC, these corporates, with significant exposure overseas, seek to optimise global cash management, access international funding, and enhance foreign exchange efficiency. These firms also benefit from GIFT IFSC's ability to centralise cross-border transactions, hedge currency risks, and manage intra-group financing, all in foreign currency. GIFT IFSC also has no withholding tax on interest and can repatriate profits. It also allows them to access global debt markets and list bonds on India INX of NSE IFSC to improve flexibility in funding.

While there is little public information about the operations of these treasuries, the IOC Global Capital Management IFSC Ltd. is said to have facilitated significant activity—financing of over $250 million for various Indian Oil group companies. In January last year, it raised $100 million through a loan from DBS Singapore, IFSCA officials said.

Rajaraman said that the IFSCA has also given clearance to S&P Global Ratings Singapore Ptd. Ltd. to set up an IFSC Branch, in addition to CareEdge Global IFSC Ltd. "Coming of S&P is a big thing," Rajaraman said. The credit rating agencies at GIFT IFSC are said to be crucial to increasing listings, help treasury centres and reduce off-shore dependency to get faster debt and follow regulatory compliances.

In October, CareEdge had launched its global sovereign rating platform from GIFT City and rated India's long-term foreign currency sovereign debt as investment grade BBB+. It also assessed 39 countries in all. In December, it assigned CareEdge B-/Stable rating to $10 million foreign currency bond, along with a proposed $20 million external commercial borrowing facility, issued by TruCap Finance.

Other than treasuries and rating agencies, Rajaraman said that the IFSC is also receiving applications from banks in European and West Asian regions to set up IFSC Banking Units in the GIFT City. Recently, Credit Agricole Corporate and Investment Bank, Natixis and Societe Generale from France have been given nod to set up IFSC Banking Units in GIFT City. "We expect another five to six global banks to call on and set up IBUs in the coming three to four months. More banks are in the queue," IFSCA chairman said.

An IBU in the GIFT City works as an overseas branch of the bank. Qatar National Bank was the first bank to set up a base in GIFT City in May. Now, Abu Dhabi Bank PJSC and Mashreq Bank PSC have formally applied to set up IBUs. Currently, there are 31 IBUs in GIFT City, of which 14 are international banks, Rajaraman said.

At 1025 IST, the shares of GAIL traded 1.8% down at INR 196.51 per share on the National Stock Exchange.  End

US$1 = INR 85.54

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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